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Exhibit 10.14
THE PEREGRINE REAL ESTATE TRUST
LOAN AND SECURITY AGREEMENT
DATED AS OF DECEMBER 4, 1997
$20,000,000
FLEET CAPITAL CORPORATION
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TABLE OF CONTENTS
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SECTION 1 CREDIT FACILITY.................................................................. 1
1.1 Revolving Credit Loans...................................................... 1
1.1.1 Loans and Reserves............................................. 1
1.1.2 Use of Proceeds................................................ 2
1.2 [intentionally omitted] .................................................... 3
1.3 [intentionally omitted] .................................................... 3
SECTION 2 INTEREST, FEES AND CHARGES ...................................................... 3
2.1 Interest.................................................................... 3
2.1.1 Rates of Interest. ............................................. 3
2.1.2 Default Rate of Interest. ...................................... 4
2.1.3 Maximum Interest. .............................................. 4
2.2 Computation of Interest and Fees............................................ 4
2.3 Rate Elections.............................................................. 5
2.4 LIBOR Option................................................................ 5
2.5 Closing Fee................................................................. 6
2.6 [intentionally omitted]..................................................... 6
2.7 Unused Line Fee............................................................. 6
2.8 [intentionally omitted]..................................................... 6
2.9 Audit and Appraisal Fees.................................................... 6
2.10 Reimbursement of Expenses................................................... 7
2.11 Bank Charges................................................................ 8
SECTION 3 LOAN ADMINISTRATION ............................................................. 8
3.1 Manner of Borrowing Revolving Credit Loans.................................. 8
3.1.1 Loan Requests. ................................................ 8
3.1.2 Disbursement. ................................................. 8
3.1.3 Authorization. ................................................ 9
3.2 Payments.................................................................... 9
3.2.1 Principal. .................................................... 9
3.2.2 Interest. ..................................................... 9
3.2.3 Costs, Fees, and Charges 10
3.2.4 Other Obligations 10
3.3 Mandatory Prepayments....................................................... 10
3.4 Application of Payments and Collections..................................... 10
3.5 All Loans to Constitute One Obligation...................................... 10
3.6 Loan Account................................................................ 10
3.7 Statements of Account....................................................... 11
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3.8 Partial Reduction of Maximum Amount......................................... 11
SECTION 4 TERM AND TERMINATION ............................................................ 11
4.1 Term of Agreement........................................................... 11
4.2 Termination................................................................. 11
4.2.1. Termination by Lender......................................... 11
4.2.2. Termination by Borrower....................................... 11
4.2.3. [intentionally omitted]....................................... 12
4.2.4. Effect of Termination......................................... 12
SECTION 5 SECURITY INTERESTS .............................................................. 12
5.1 Interest in Collateral...................................................... 12
5.2 Lien Perfection; Further Assurances......................................... 13
5.3 Lien on Realty.............................................................. 13
5.4 Release of Portions of the Eligible Real Property........................... 13
SECTION 6 COLLATERAL ADMINISTRATION ....................................................... 14
6.1 General..................................................................... 14
6.1.1. Location of Collateral. ...................................... 15
6.1.2. Insurance of Collateral. ..................................... 15
6.1.3. Protection of Collateral. .................................... 15
6.2 Administration of Accounts, Payment General Intangibles, and
Rents....................................................................... 15
6.2.1. Records, Schedules, and Assignments of
Accounts............................................................. 15
6.2.2. [intentionally omitted]. ..................................... 16
6.2.3. [intentionally omitted]. ..................................... 16
6.2.4. [intentionally omitted]. ..................................... 16
6.2.5. [intentionally omitted]. ..................................... 16
6.2.6. Collection of Collateral. .................................... 16
6.3 Administration of Inventory................................................. 16
6.3.1. Records and Reports of Inventory. ............................ 16
6.3.2. [intentionally omitted]. ..................................... 16
6.4 Administration of Equipment................................................. 16
6.4.1. Records and Schedules of Equipment. .......................... 16
6.4.2. Dispositions of Equipment. ................................... 16
6.5 Payment of Charges.......................................................... 17
SECTION 7.REPRESENTATIONS AND WARRANTIES .................................................. 17
7.1 General Representations and Warranties...................................... 17
7.1.1. Organization and Qualification. .............................. 17
7.1.2. Power and Authority. ......................................... 17
7.1.3. Legally Enforceable Agreement. ............................... 18
7.1.4. Deferred Taxes ............................................... 18
7.1.5. Names. ....................................................... 18
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7.1.6. Business Locations; Agent for Process. ....................... 18
7.1.7. Title to Properties; Priority of Liens. ...................... 18
7.1.8. [intentionally omitted] ...................................... 18
7.1.9. Related Equipment. ........................................... 18
7.1.10 Financial Statements; Fiscal Year...................... 19
7.1.11 Full Disclosure........................................ 19
7.1.12 Solvent Financial Condition............................ 19
7.1.13 Surety Obligations..................................... 19
7.1.14 Taxes.................................................. 19
7.1.15 Brokers................................................ 19
7.1.16 Patents, Trademarks, Copyrights, and
Licenses............................................... 20
7.1.17 Governmental Consents.................................. 20
7.1.18 Compliance with Laws................................... 20
7.1.19 Restrictions........................................... 20
7.1.20 Litigation............................................. 20
7.1.21 No Defaults............................................ 20
7.1.22 Leases................................................. 21
7.1.23 Pension Plans.......................................... 21
7.1.24 Trade Relations........................................ 21
7.1.25 Labor Relations........................................ 21
7.1.26 [intentionally omitted]................................ 21
7.1.27 [intentionally omitted]................................ 21
7.2 [intentionally omitted]..................................................... 21
7.3 Survival of Representations and Warranties.................................. 21
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS ............................................ 22
8.1 Affirmative Covenants....................................................... 22
8.1.1. Visits and Inspections. ...................................... 22
8.1.2. Notices. ..................................................... 22
8.1.3. Financial Statements. ........................................ 22
8.1.4. Capital Expenditure Plans. ................................... 23
8.1.5. Projections. ................................................. 23
8.1.6. Collateral Reporting. ........................................ 23
8.1.7. Related Equipment. ........................................... 24
8.2 Negative Covenants ......................................................... 24
8.2.1. Mergers; Consolidations; Acquisitions. ....................... 24
8.2.2. Loans. ....................................................... 24
8.2.3. Total Indebtedness. .......................................... 24
8.2.4. Affiliate Transactions. ...................................... 25
8.2.5. Limitation on Liens. ......................................... 26
8.2.6. [intentionally omitted]. ..................................... 26
8.2.7. Distributions. ............................................... 27
8.2.8. Capital Expenditures. ........................................ 27
8.2.9. Disposition of Collateral. ................................... 27
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8.2.10 [intentionally omitted] ............................... 27
8.2.11 [intentionally omitted] ............................... 27
8.2.12 Restricted Investment ................................. 27
8.2.13 Leases ................................................ 27
8.2.14 Tax Consolidation ..................................... 27
8.2.15 Prepayments and Repayments ............................ 27
8.2.16 Amendment of Certain Documents ........................ 28
8.3 Specific Financial Covenants ............................................... 28
8.3.1. [intentionally omitted] ...................................... 29
8.3.2. Debt Service Coverage Ratio. ................................. 29
8.3.3. [intentionally omitted] ...................................... 30
SECTION 9 CONDITIONS PRECEDENT ........................................................... 30
9.1 Documentation............................................................... 30
9.2 Other Loan Documents........................................................ 30
9.3 Approvals and Consents...................................................... 30
9.4 Certified Documents of Borrower............................................. 30
9.5 Confirmation Searches....................................................... 31
9.6 Opinion of Counsel.......................................................... 31
9.7 Material Adverse Changes.................................................... 31
9.8 Pay-Off Letter and UCC Termination Statements, Etc.......................... 31
9.9 Mortgages................................................................... 31
9.10 Title Insurance............................................................. 31
9.11 Due Diligence............................................................... 31
9.12 Tax Servicing Contract...................................................... 31
9.13 Availability................................................................ 31
9.14 Projections................................................................. 32
SECTION 9A CONDITIONS PRECEDENT ........................................................... 32
9A.1 No Default.................................................................. 32
9A.2 Representations and Warranties.............................................. 32
9A.3 Adverse Changes............................................................. 32
9A.4 Injunctions................................................................. 32
SECTION ▇▇.▇▇▇▇▇▇ OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT .............................. 32
10.1 Events of Default........................................................... 32
10.1.1 [intentionally omitted]................................ 32
10.1.2 Payment of Obligations................................. 32
10.1.3 Misrepresentations..................................... 33
10.1.4 Breach of Specific Covenants........................... 33
10.1.5 Breach of Other Covenants.............................. 33
10.1.6 Default Under Security Documents/Other
Agreements............................................. 33
10.1.7 Other Defaults......................................... 33
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10.1.8 Uninsured Losses....................................... 34
10.1.9 Adverse Changes........................................ 34
10.1.10 Insolvency and Related Proceedings..................... 34
10.1.11 Business Disruption; Condemnation...................... 34
10.1.12 Change of Control...................................... 34
10.1.13 ERISA.................................................. 34
10.1.14 Challenge to Agreement................................. 34
10.1.15 [intentionally omitted]................................ 34
10.1.16 Criminal Forfeiture.................................... 35
10.1.17 Judgments.............................................. 35
10.1.18 Loss of Hotel Franchise................................ 35
10.2 Acceleration of the Obligations............................................. 35
10.3 Other Remedies.............................................................. 35
10.4 Remedies Cumulative; No Waiver.............................................. 36
SECTION 11 MISCELLANEOUS .................................................................. 37
11.1 Power of Attorney........................................................... 37
11.2 Indemnity................................................................... 37
11.3 Modification of Agreement; Sale of Interest................................. 38
11.4 Severability................................................................ 38
11.5 Successors and Assigns...................................................... 38
11.6 Cumulative Effect; Conflict of Terms........................................ 38
11.7 Execution in Counterparts................................................... 39
11.8 Notice...................................................................... 39
11.9 Lender's Consent............................................................ 40
11.10 Credit Inquiries ........................................................... 40
11.11 Certain Matters of Construction ............................................ 40
11.12 Entire Agreement ........................................................... 40
11.13 Interpretation ............................................................. 40
11.14 GOVERNING LAW; CONSENT TO FORUM ............................................ 40
11.15 WAIVERS .................................................................... 41
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of December 4, 1997,
by and between FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender"),
with an office at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ and THE PEREGRINE REAL ESTATE TRUST, a California real estate trust
("Borrower"), with its chief executive office and principal place of business at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Capitalized terms
used in this Agreement have the meanings assigned to them in Appendix A attached
hereto. Accounting terms not otherwise specifically defined herein shall be
construed in accordance with GAAP, consistently applied.
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lender agrees to make a Total Credit Facility of up to $20,000,000
available upon Borrower's request therefor, as follows:
1.1 Revolving Credit Loans.
1.1.1 Loans and Reserves.
(a) Lender agrees, for so long as no Default or
Event of Default exists and subject to the satisfaction of the applicable
conditions precedent set forth in Sections 9 and 9A hereof, to make Revolving
Credit Loans to Borrower from time to time, as requested by Borrower in the
manner set forth in subsection 3.1.1 hereof, up to a maximum principal amount at
any time outstanding equal to the lesser of (i) the Maximum Amount, or (ii) the
Borrowing Base at such time minus the amount of reserves, if any.
(b) Subject to subsections 1.1.1(c) and 1.1.1(d)
below, Lender shall have the right to establish reserves in such amounts, and
with respect to such matters, as Lender shall deem necessary or appropriate in
Lender's reasonable credit judgment (from the perspective of a secured lender),
against the amount of Revolving Credit Loans which Borrower may otherwise
request under this subsection 1.1.1, including, without limitation, with respect
to: (i) ad valorem and other taxes payable by Borrower with respect to the
Collateral; (ii) premiums for casualty insurance with respect to the Eligible
Real Property; (iii) the costs of remediation of environmental conditions
existing at the Eligible Real Property; (iv) the costs of repairs or other
required maintenance of the Eligible Real Property (including, without
limitation, in respect of any Earthquake Material
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Loss); (v) other sums chargeable against Borrower's Loan Account as Revolving
Credit Loans under any section of this Agreement; (vi) amounts owing by Borrower
to any Person to the extent secured by a Lien on, or trust over, any Collateral;
and (vii) such other matters, events, conditions or contingencies as to which
Lender, in Lender's reasonable credit judgment (from the perspective of a
secured lender), determines reserves should be established from time to time
hereunder.
(c) With respect to any parcel of real Property
included in the Borrowing Base as Eligible Real Property, in the event that the
aggregate amount of reserves established and maintained by Lender proximately
with respect to such parcel of real Property exceeds the Borrowing Base Value
thereof, Borrower shall have the right to remove such parcel of real Property
permanently from the Borrowing Base by delivering irrevocable written notice of
such removal to Lender and, concurrently therewith, repaying any Overadvance
that would result from such removal (and such removed parcel of real Property
thereafter shall no longer constitute Eligible Real Property).
(d) With respect to any reserve established and
maintained by Lender under clause (iii) or (iv) in subsection 1.1.1(b) above,
Borrower shall have the right to request Lender to disburse the proceeds of a
Revolving Credit Loan, in the amount of and in lieu of such reserve, under
staged payment terms reasonably satisfactory to Lender for application to the
payment in full of such items described in such clause (iii) or (iv), as the
case may be, if and only if all of the following conditions are satisfied:
(i) no Default or Event of Default has occurred and is continuing
and no Overadvance or Event of Default would result from the
disbursement or application of such monies;
(ii) Borrower shall have cash, cash equivalents, or borrowing
availability under this subsection 1.1.1 in amounts sufficient, in
Lender's reasonable judgment, to ensure that Borrower will be able to
make payment as and when due of each of its direct Obligations that will
be payable during the period of such remediation, repair, or required
maintenance;
(iii) Lender is reasonably satisfied that the amount of such
cash, cash equivalents, and/or borrowing availability, will be
sufficient fully to remediate, repair, or maintain the affected Eligible
Real Property; and
(iv) completion of the remediation, repair, or required
maintenance of the affected Eligible Real Property shall be completed
with reasonable promptness in accordance with budgets, plans,
specifications, and drawings submitted to and approved by Lender, which
approval shall not be unreasonably withheld or delayed.
1.1.2 Use of Proceeds. The Revolving Credit Loans shall be
used solely for the satisfaction of existing Indebtedness of Borrower to
Existing Lender and for
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Borrower's general operating capital needs in a manner consistent with the
provisions of this Agreement and all applicable laws.
1.2 [intentionally omitted].
1.3 [intentionally omitted].
SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest.
(a) [intentionally omitted].
(b) Revolving Credit Loans. During all times that a
Base Rate Election is in effect, interest shall accrue on the
principal amount of the Base Rate Revolving Credit Portion
outstanding at the end of each day at a fluctuating rate per
annum equal to one-quarter of one percent (1/4%) plus the Base
Rate; provided, however, that, from and after December 31, 1998,
the foregoing rate of interest shall be decreased (a) by
one-quarter of one percent (1/4%) per annum if no Default or
Event of Default exists and if Borrower's financial statements
for any Trailing Twelve Month Period ended on or after December
31, 1998 and delivered to Lender pursuant to subsection 8.1.3
indicate that Borrower achieved a Debt Service Coverage Ratio of
1.0:1.0, or greater, for the Trailing Twelve Month Period for
which such statements were issued, and (b) by an additional
one-quarter of one percent (1/4%) per annum if no Default or
Event of Default exists and if Borrower's financial statements
for any Trailing Twelve Month Period ended on or after December
31, 1998 and delivered to Lender pursuant to subsection 8.1.3
indicate that Borrower achieved a Debt Service Coverage Ratio of
1.2:1.0, or greater, for the Trailing Twelve Month Period for
which such statements were issued. The foregoing proviso
notwithstanding, if the subsequently issued audited financial
statements for Borrower disclose that the required Debt Service
Coverage Ratio was not, in fact, attained for the relevant
period, then the interest rate shall be retroactively readjusted
to the rate that would have been in effect if the adjustment had
not been made. The rate of interest shall increase or decrease by
an amount equal to any increase or decrease in the Base Rate,
effective as of the opening of business on the day that any such
change in the Base Rate occurs.
During all times that a LIBOR Election is in effect,
interest shall accrue on the principal amount of the LIBOR
Portions outstanding at the end of each day at a rate per annum
equal to two and three-quarters percent (2-
3.
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3/4%) plus the LIBOR Rate applicable to the relevant LIBOR
Portions for the corresponding LIBOR Period; provided, however,
that, from and after December 31, 1998, the foregoing rate of
interest shall be decreased (a) by one-quarter of one percent
(1/4%) per annum if no Default or Event of Default exists and if
Borrower's financial statements for any Trailing Twelve Month
Period ended on or after December 31, 1998 and delivered to
Lender pursuant to subsection 8.1.3 indicate that Borrower
achieved a Debt Service Coverage Ratio of 1.0:1.0, or greater,
for the Trailing Twelve Month Period for which such statements
were issued, and (b) by an additional one-quarter of one percent
(1/4%) per annum if no Default or Event of Default exists and if
Borrower's financial statements for any Trailing Twelve Month
Period ended on or after December 31, 1998 and delivered to
Lender pursuant to subsection 8.1.3 indicate that Borrower
achieved a Debt Service Coverage Ratio of 1.2:1.0, or greater,
for the Trailing Twelve Month Period for which such statements
were issued. The foregoing proviso notwithstanding, if the
subsequently issued audited financial statements for Borrower
disclose that the required Debt Service Coverage Ratio was not,
in fact, attained for the relevant period, then the interest rate
shall be retroactively readjusted to the rate that would have
been in effect if the adjustment had not been made.
2.1.2 Default Rate of Interest. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, the
principal amount of all Loans shall bear interest at a rate per annum equal to
2% above the interest rate otherwise applicable thereto (the "Default Rate") and
Borrower shall not have the right to make a LIBOR Election or any LIBOR Request
in connection therewith.
2.1.3 Maximum Interest. In no event whatsoever shall the
aggregate of all amounts deemed interest hereunder and charged or collected
pursuant to the terms of this Agreement exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. If any provisions of this Agreement are
in contravention of any such law, such provisions shall be deemed amended to
conform thereto.
2.2 Computation of Interest and Fees. Interest and unused line
fees hereunder shall be calculated daily and shall be computed on the actual
number of days elapsed over a year of 360 days. For the purpose of computing
interest hereunder, all items of payment received by Lender shall be deemed
applied by Lender on account of the Obligations (subject to final payment of
such items) as follows: (a) if Lender receives such items in Lender's account
located at Fleet National Bank of Connecticut in Hartford, Connecticut or such
other account as Lender may designate by written notice to Borrower
(collectively, the "Fleet Account") on or before 10:00 a.m. (Los Angeles time)
of any Business Day, such items shall be deemed so applied on such Business Day;
and (b) if Lender receives such items in the Fleet Account on a non-Business Day
or after 10:00 a.m.
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(Los Angeles time) on any Business Day, such items shall be deemed so applied on
the immediately following Business Day.
2.3 Rate Elections. Unless a LIBOR Election is in effect,
Borrower shall be deemed to have made an effective Base Rate Election.
2.4 LIBOR Option.
(a) Upon the conditions that: (i) Lender shall have
received a LIBOR Request from Borrower at least 3 Business Days
prior to the first day of the LIBOR Period requested, (ii) there
shall have occurred no change in applicable law which would make
it unlawful for Lender to obtain deposits of U.S. dollars in the
London interbank foreign currency deposits market, (iii) as of
the date of the LIBOR Request and the first day of the LIBOR
Period, there shall exist no Default or Event of Default, (iv)
Lender is able to determine the LIBOR Rate in respect of the
requested LIBOR Period or Lender is able to obtain deposits of
U.S. dollars in the London interbank foreign currency deposits
market in the applicable amounts and for the requested LIBOR
Period, and (v) as of the first date of the LIBOR Period, there
are no more than 6 outstanding LIBOR Portions, including the
LIBOR Portion being requested; then interest on the LIBOR Portion
requested during the LIBOR Period requested will be based on the
applicable LIBOR Rate.
(b) Each LIBOR Request shall be irrevocable and
binding on Borrower. Borrower shall indemnify Lender for any
loss, penalty, or expense incurred by Lender due to failure on
the part of Borrower to fulfill, on or before the date specified
in any LIBOR Request, the applicable conditions set forth in this
Agreement or due to the prepayment of the applicable LIBOR
Portion prior to the last day of the applicable LIBOR Period,
including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by reason of the
liquidation or redeployment of deposits or other funds acquired
by Lender to fund or maintain the requested LIBOR Revolving
Credit Portion.
(c) If any Legal Requirement shall (i) make it
unlawful for Lender to fund through the purchase of U.S. dollar
deposits any LIBOR Revolving Credit Portion, or otherwise give
effect to its obligations as contemplated under this subsection
2.4, or (ii) shall impose on Lender any costs based on or
measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of Lender which
includes deposits by reference to which the LIBOR Rate is
determined as provided herein or a category of extensions of
credit or other assets of Lender which includes any LIBOR
Portion, or (iii) shall impose on Lender any restrictions on the
amount of such a category of liabilities or assets which Lender
may
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hold, then, in each such case, Lender may, by notice thereof to
Borrower, terminate the LIBOR Election. Any LIBOR Portion subject
thereto shall immediately bear interest thereafter at the rate
and in the manner provided for Base Rate Portions pursuant
hereto. Borrower shall indemnify Lender against any loss,
penalty, or expense incurred by Lender due to liquidation or
redeployment of deposits or other funds acquired by Lender to
fund or maintain any LIBOR Portion that is terminated hereunder.
(d) Lender shall receive payments of amounts of
principal of and interest on the Revolving Credit Loans with
respect to the LIBOR Portions free and clear of, and without
deduction for, any Taxes. If (i) Lender shall be subject to any
Tax in respect of any LIBOR Portion, or any part thereof, or (ii)
Borrower shall be required to withhold or deduct any Tax from any
such amount, the LIBOR Rate applicable to such LIBOR Portion
shall be adjusted by Lender to reflect all additional costs
incurred by Lender in connection with the payment by Lender or
the withholding by Borrower of such Tax and Borrower shall
provide Lender with a statement detailing the amount of any such
Tax actually paid by Borrower. Determination by Lender of the
amount of such costs shall, in the absence of manifest error, be
conclusive. If after any such adjustment any part of any Tax paid
by Lender is subsequently recovered by Lender, Lender shall
reimburse Borrower to the extent of the amount so recovered. A
certificate of an officer of Lender setting forth the amount of
such recovery and the basis therefore shall, in the absence of
manifest error, be conclusive.
2.5 Closing Fee. Borrower shall pay to Lender a closing fee of
$100,000 which shall be fully earned and nonrefundable on the Closing Date and
shall be paid concurrently with the initial Loan hereunder. Lender acknowledges
receipt of a $25,000 good faith deposit pursuant to that certain letter of
intent, dated September 15, 1997, between Borrower and Lender, and Borrower and
Lender agree that the balance (if any) of such deposit remaining after
application of such deposit to Lender's out-of-pocket expenses reimburseable
hereunder shall be credited toward such closing fee.
2.6 [intentionally omitted].
2.7 Unused Line Fee. Borrower shall pay to Lender a fee equal to
0.5% per annum of the average monthly amount by which the Maximum Amount exceeds
the sum of the outstanding principal balance of the Revolving Credit Loans. The
unused line fee shall be payable monthly in arrears on the first day of each
calendar month hereafter.
2.8 [intentionally omitted].
2.9 Audit and Appraisal Fees.
6.
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2.9.1 Borrower shall pay to Lender all reasonable out-
of-pocket costs and expenses incurred by Lender in connection with audits and
appraisals of Borrower's books and records or the Collateral, plus all fees and
expenses incurred by Lender in connection with any appraisals of the Collateral
commissioned by Lender and performed by third party appraisers. All such fees,
costs, and expenses shall be payable on the first day of the month following the
date of issuance by Lender of a request for payment thereof to Borrower.
2.9.2 Anything contained in this Agreement to the contrary
notwithstanding, and without limiting the ability of Lender to conduct
appraisals more frequently, Borrower acknowledges and agrees that: (a) Lender
intends to cause the Eligible Real Property to be appraised (i) at least once
per year, (ii) concurrent with each Permitted Real Property Disposition, and
(iii) following the removal by Borrower of any Eligible Real Property from the
Borrowing Base pursuant to subsection 1.1.1(c) above or in connection with the
removal by Borrower of any Eligible Real Property from the Borrowing Base
pursuant to clause (d) set forth in the definition of "Earthquake Suspension
Period" in Appendix A hereto; and (b) as a result, the Appraised Value thereof
will be adjusted once the results of each such appraisal are received by Lender.
So long as no Event of Default has occurred and is continuing, Borrower shall
not be required to pay the fees, costs, and expenses under subsection 2.9.1 in
respect of any Eligible Real Property appraisals that are not described in
clauses (a)(i), (a)(ii), and (a)(iii) of the immediately preceding sentence.
2.10 Reimbursement of Expenses. If, at any time or times
regardless of whether an Event of Default then exists, Lender incurs legal or
accounting expenses or any other reasonable costs or out-of-pocket expenses in
connection with (a) the negotiation and preparation of this Agreement or any of
the other Loan Documents, any amendment of or modification of this Agreement or
any of the other Loan Documents, (b) the administration of this Agreement or any
of the other Loan Documents and the transactions contemplated hereby and
thereby, (c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Lender, Borrower, or any other Person) in any way
relating to the Collateral, this Agreement or any of the other Loan Documents or
Borrower's affairs, (d) any attempt to enforce any rights of Lender against
Borrower or any other Person which may be obligated to Lender by virtue of this
Agreement or any of the other Loan Documents, or (e) any attempt to inspect,
verify, protect, preserve, restore, collect, sell, liquidate or otherwise
dispose of or realize upon the Collateral; then all such legal and accounting
expenses, other reasonable costs and out-of-pocket expenses of Lender shall be
charged to Borrower. All amounts chargeable to Borrower under this subsection
2.10 shall be Obligations secured by all of the Collateral, shall bear interest
from the date incurred until paid in full at the rate applicable to Revolving
Credit Loans from time to time, and shall be charged by Lender to Borrower's
Loan Account as Revolving Credit Loans. Borrower also shall reimburse Lender for
reasonable expenses incurred by Lender in its administration of the Collateral
to the extent and in the manner provided in Section 6 hereof.
7.
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2.11 Bank Charges. Borrower shall pay to Lender, pursuant to
subsection 3.1.3, any and all actual fees, costs, or expenses that Lender pays
to a bank or other similar institution arising out of or in connection with (a)
the forwarding to Borrower or any other Person on behalf of Borrower, by Lender
of proceeds of Loans made by Lender to Borrower pursuant to this Agreement, and
(b) the depositing for collection by Lender of any check or item of payment
received by or delivered to Lender on account of the Obligations.
SECTION 3. LOAN ADMINISTRATION
3.1 Manner of Borrowing Revolving Credit Loans. Borrowings under
the credit facility established pursuant to Section 1 hereof shall be as
follows:
3.1.1 Loan Requests. A request for a Revolving Credit Loan
shall be made, or shall be deemed to be made, in the following manner: (a)
Borrower may give Lender notice of its intention to borrow, in which notice
Borrower shall specify the amount of the proposed borrowing and the proposed
borrowing date, no later than 11:00 a.m. (Los Angeles time) on the proposed
borrowing date; provided, however, that no such request may be made at a time
when the conditions precedent set forth in Section 9A hereof are not satisfied,
and (b) the becoming due of any amount required to be paid under this Agreement,
whether as interest or for any other Obligation, shall be deemed irrevocably to
be a request for a Revolving Credit Loan on the due date in the amount required
to pay such interest or other Obligation. As an accommodation to Borrower,
Lender may permit telephonic requests for Loans and electronic transmittal of
instructions, authorizations, agreements or reports to Lender by Borrower.
Unless Borrower specifically directs Lender in writing not to accept or act upon
telephonic or electronic communications from Borrower, Lender shall have no
liability to Borrower for any loss or damage suffered by Borrower as a result of
Lender's honoring of any requests, execution of any instructions,
authorizations, or agreements, or reliance on any reports communicated to it
telephonically or electronically and purporting to have been sent to Lender by
Borrower, and Lender shall have no duty to verify the origin of any such
communication or the authority of the person sending it.
3.1.2 Disbursement. Borrower hereby irrevocably authorizes
Lender to disburse the proceeds of each Revolving Credit Loan requested, or
deemed to be requested, pursuant to this subsection 3.1 as follows: (a) the
proceeds of each Revolving Credit Loan requested under subsection 3.1.1(a)
hereof shall be disbursed by Lender in lawful money of the United States of
America in immediately available funds, in the case of the initial borrowing, in
accordance with the terms of a written disbursement letter from Borrower, and in
the case of each subsequent borrowing, by wire transfer to such bank account as
may be agreed upon by Borrower and Lender from time to time or elsewhere if
pursuant to a written direction from Borrower, and (b) the proceeds of each
Revolving Credit Loan requested under subsection 3.1.1(b) hereof shall be
disbursed by Lender by way of direct payment of the relevant interest or other
Obligation.
8.
15
3.1.3 Authorization. Borrower hereby irrevocably
authorizes Lender to advance to Borrower, by charging to Borrower's Loan Account
hereunder as a Revolving Credit Loan, a sum sufficient to pay all interest
accrued on the Obligations during the immediately preceding month and to pay all
fees, costs, and expenses at any time owed by Borrower to Lender to the extent
provided for hereunder.
3.2 Payments. The Obligations shall be payable as follows:
3.2.1 Principal. Principal payable on account of Revolving
Credit Loans shall be repayable in full by Borrower to Lender immediately upon
the earliest of (a) the receipt by Lender or Borrower of any net cash proceeds
of the Permitted Real Property Disposition of any of the Collateral, to the
extent of said proceeds, except that, so long as no Default or Event of Default
exists (i) if all Loans outstanding at the time of receipt by Borrower of any
such proceeds are LIBOR Portions, then Borrower may direct that such proceeds be
held by Lender in a non-interest bearing cash collateral account maintained by
Lender to be applied to the payment of principal on the last day of the LIBOR
Period applicable to each LIBOR Portion in the order of maturity, and (ii) so
long as no Earthquake Suspension Period is then in effect and if, after giving
effect to such payment or prepayment, Borrower would be entitled to borrow at
least $1.00 under subsection 1.1.1 hereof (based, in part, upon an updated
determination of the Appraised Value of the remaining Eligible Real Property),
Borrower shall be entitled to apply all or any portion of such proceeds to the
payment or prepayment of the outstanding principal of the Senior Notes, (b) the
occurrence of an Event of Default in consequence of which Lender elects to
accelerate the maturity and payment of the Obligations, or (c) termination of
this Agreement pursuant to Section 4 hereof; provided, however, that if an
Overadvance shall exist, Borrower shall, on demand, repay the Overadvance.
3.2.2 Interest.
(a) Base Rate Revolving Credit Portion. Interest
accrued on Base Rate Portions shall be due on the earliest of (i)
the first calendar day of each month (for the immediately
preceding month), computed through the last calendar day of the
preceding month, (ii) the occurrence and continuation of an Event
of Default in consequence of which Lender elects to accelerate
the maturity and payment of the Obligations, or (iii) termination
of this Agreement pursuant to Section 4 hereof.
(b) LIBOR Revolving Credit Portion. Interest
accrued on each LIBOR Portion shall be due and payable on the
earliest of (i) the last day of the Interest Period applicable to
such LIBOR Revolving Credit Portion, (ii) the occurrence of an
Event of Default in consequence of which Lender elects to
accelerate the maturity and payment of the Obligations, or (iii)
termination of this Agreement pursuant to Section 4 hereof.
9.
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3.2.3 Costs, Fees, and Charges. Costs, fees, and charges
payable pursuant to this Agreement shall be payable by Borrower as, when, and in
the manner provided in Section 2 hereof, to Lender, or to any other Person
designated by Lender in writing.
3.2.4 Other Obligations. The balance of the Obligations
requiring the payment of money, if any, shall be payable by Borrower to Lender
as and when provided in this Agreement, the Other Agreements, or the Security
Documents, or on demand therefor, whichever is earlier.
3.3 Mandatory Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction, or Condemnation
of Collateral. Except as provided in subsection 3.2.1 and subsection 6.4.2
hereof, if Borrower sells any of the Collateral or if any of the Collateral is
lost or destroyed or taken by condemnation, Borrower shall pay to Lender, unless
otherwise agreed by Lender, as and when received by Borrower and as a mandatory
prepayment of the Revolving Credit Loans, a sum equal to the net cash proceeds
(including insurance payments) received by Borrower from such sale, loss,
destruction, or condemnation.
3.3.2 [intentionally omitted].
3.4 Application of Payments and Collections. For purposes of
calculating Availability, all items of payment received by Lender by 12:00 noon
(Los Angeles time) on any Business Day shall be deemed received on that Business
Day. All items of payment received after 12:00 noon (Los Angeles time) on any
Business Day shall be deemed received on the following Business Day. Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by Lender from or on
behalf of Borrower, and Borrower does hereby irrevocably agree that, subject to
subsection 3.2.1(a)(i) hereof, Lender shall have the continuing exclusive right
to apply and reapply any and all such payments and collections received at any
time or times hereafter by Lender or its agent against the Obligations, in such
manner as Lender may deem advisable, notwithstanding any entry by Lender upon
any of its books and records.
3.5 All Loans to Constitute One Obligation. The Loans shall
constitute one general Obligation of Borrower, and shall be secured by Lender's
Lien upon all of the Collateral.
3.6 Loan Account. Lender shall enter all Loans as debits to the
Loan Account and also shall record in the Loan Account all payments made by
Borrower on any Obligations and all proceeds of Collateral that are finally paid
to Lender, and may record therein, in accordance with customary accounting
practices, other debits and credits,
10.
17
including interest and all fees, costs, and expenses chargeable to Borrower to
the extent provided for hereunder.
3.7 Statements of Account. Lender will account to Borrower
monthly with a statement of Loans, charges, and payments made pursuant to this
Agreement, and such account rendered by Lender (absent manifest error) shall be
deemed final, binding and conclusive upon Borrower unless Lender is notified by
Borrower in writing to the contrary within 30 days of the date each accounting
is mailed to Borrower. Such notice only shall be deemed an objection to those
items specifically objected to therein.
3.8 Partial Reduction of Maximum Amount. Borrower shall have the
right, upon at least five (5) Business Days prior written notice to Lender, to
reduce the then extant Maximum Amount, without premium; provided, however, that
(a) each partial reduction shall be in the aggregate amount of One Million
Dollars ($1,000,000) or an integral multiple thereof, (b) the Maximum Amount
shall not, in any event, be reduced to equal less than Ten Million Dollars
($10,000,000), and (c) Borrower shall, concurrently with any such reduction,
repay any Overadvance then outstanding (including, without limitation, any
Overadvance that would result from such reduction).
SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement. Subject to Lender's right to cease making
Loans to Borrower after the occurrence and during the continuation of any
Default or Event of Default, this Agreement shall be in effect for a period from
the date hereof through and including September 30, 2000 (the "Original Term"),
and this Agreement shall automatically renew itself for one-year periods
thereafter (the "Renewal Terms"), in each case, unless terminated as provided in
subsection 4.2 hereof.
4.2 Termination.
4.2.1 Termination by Lender. Upon at least 90 days prior
written notice to Borrower, Lender may terminate this Agreement as of the last
day of the Original Term or the then current Renewal Term, and Lender may
terminate this Agreement without notice after the occurrence and during the
continuation of an Event of Default.
4.2.2 Termination by Borrower. Upon at least 45 days prior
written notice to Lender, Borrower may, at its option, terminate this Agreement;
provided, however, that no such termination shall be effective until Borrower
has paid all of the Obligations in immediately available funds. Any notice of
termination given by Borrower shall be irrevocable unless Lender otherwise
agrees in writing, and Lender shall have no obligation to make any Loans on or
after the termination date stated in such notice. Borrower may elect to
terminate this Agreement in its entirety only. No section of this Agreement or
type of Loan available hereunder may be terminated singly.
11.
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4.2.3 [intentionally omitted].
4.2.4 Effect of Termination. Until Borrower has paid the
Obligations to Lender, in full, in immediately available funds, all of the
Obligations shall be immediately due and payable upon the termination date
stated in any notice of termination of this Agreement. All undertakings,
agreements, covenants, warranties, and representations of Borrower contained in
the Loan Documents shall survive any such termination, and Lender shall retain
its Liens in the Collateral and all of its rights and remedies under the Loan
Documents notwithstanding such termination. Notwithstanding the payment in full
of the Obligations, Lender shall not be required to terminate its security
interests in the Collateral unless, with respect to any loss or damage Lender
may incur as a result of dishonored checks or other items of payment received by
Lender and applied to the Obligations, Lender shall, at its option, (a) have
received a written agreement, executed by Borrower and by any Person whose loans
or other advances to Borrower are used in whole or in part to satisfy the
Obligations, indemnifying Lender from any such loss or damage, or (b) have
retained such monetary reserves and Liens on the Collateral for such period of
time as Lender, in its reasonable discretion, may deem necessary to protect
Lender from any such loss or damage.
SECTION 5. SECURITY INTERESTS
5.1 Interest in Collateral. To secure the prompt payment and
performance to Lender of the Obligations, Borrower hereby grants to Lender a
continuing Lien upon all of the following Property and interests in Property of
Borrower, whether now owned or existing or hereafter created, acquired, or
arising and wheresoever located:
(a) the Related Accounts;
(b) the Related Inventory;
(c) the Related Equipment;
(d) the Related General Intangibles;
(e) the Related Rents;
(f) All monies and other Property of any kind now
or at any time or times hereafter in the possession or under the
control of Lender or a bailee or Affiliate of Lender;
(g) All accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of (a)
through (f) above, including, without limitation, proceeds of and
unearned premiums with respect to insurance policies insuring any
of the Collateral; and
12.
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(h) All books and records (including, without
limitation, customer lists, credit files, computer programs,
print-outs, and other computer materials and records) of Borrower
pertaining to any of (a) through (g) above.
Anything contained herein to the contrary notwithstanding, the term
"Collateral" shall not include the Unencumbered Real Property, Unrelated
Accounts, Unrelated Inventory, Unrelated Equipment, Unrelated General
Intangibles, and Unrelated Rents.
5.2 Lien Perfection; Further Assurances. Borrower shall execute
such UCC-1 financing statements as are required by the Code and such other
instruments, assignments, or documents as are necessary to perfect Lender's Lien
upon any of the Collateral and shall take such other action as may be required
to perfect or to continue the perfection of Lender's Lien upon the Collateral.
Unless prohibited by applicable law, Borrower hereby authorizes Lender to
execute and file any such financing statement on Borrower's behalf. The parties
agree that a carbon, photographic, or other reproduction of this Agreement shall
be sufficient as a financing statement and may be filed in any appropriate
office in lieu thereof. At Lender's request, Borrower also shall promptly
execute or cause to be executed and shall deliver to Lender any and all
documents, instruments, and agreements reasonably deemed necessary by Lender to
give effect to or carry out the terms or intent of the Loan Documents.
5.3 Lien on Realty. The due and punctual payment and performance
of the Obligations shall also be secured by the Lien created by the Mortgages
upon all of the Eligible Real Property of Borrower. The Mortgages shall be
executed by Borrower in favor of Lender and shall be duly recorded, at
Borrower's expense, in each office where such recording is required to
constitute a fully perfected Lien on the Eligible Real Property covered thereby.
Borrower shall deliver to Lender, at Borrower's expense, mortgagee title
insurance policies issued by a title insurance company satisfactory to Lender,
which policies shall be in form and substance reasonably satisfactory to Lender
and shall insure a valid first Lien in favor of Lender on the Eligible Real
Property covered thereby, subject only to those exceptions acceptable to Lender
and its counsel. Borrower shall deliver to Lender such other documents,
including, without limitation, as-built survey prints of the subject real
Property, as Lender and its counsel may request relating to the real Property
subject to the Mortgages.
5.4 Release of Portions of the Eligible Real Property. So long
as no Default or Event of Default has occurred and is continuing or would result
therefrom, and subject to the satisfaction of each of the following conditions,
Lender shall, from time to time, upon 10 Business Days prior written request
therefor, deliver to an escrow or title company, a partial reconveyance or
release of its Lien upon a parcel of Borrower's Eligible Real Property (and the
Personal Property Collateral in respect thereof):
13.
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(i) Lender shall have received or shall receive,
concurrent with the delivery of such release or reconveyance, all or
such portion of the net cash proceeds of such sale as is necessary to
insure that the Obligations outstanding after giving effect to the
reconveyance or release do not exceed the lesser of (y) the Maximum
Amount, or (z) the re-established Borrowing Base;
(ii) the proposed release or reconveyance is of one
of the legal parcels set forth on Schedule E-1 attached hereto and not a
subdivision thereof;
(iii) prior to the transfer date, Borrower shall
have delivered an irrevocable instruction to the escrow or title company
directing that they only are authorized to record the release or the
reconveyance upon payment of all or the applicable portion of the net
cash proceeds of such sale (as determined by clause (i) above) to
Lender;
(iv) prior to or on the transfer date, Lender shall
have received the results of a reappraisal of the Eligible Real Property
remaining after such transfer and shall have re-established the amount
of the Borrowing Base after giving effect to such transfer and release
of the subject Eligible Real Property and also shall have established
that the Obligations outstanding after giving effect to the transfer and
release will not exceed the lesser of (y) the Maximum Amount, or (z) the
re-established Borrowing Base; and
(v) prior to or on the transfer date, Borrower
shall reimburse Lender for the reasonable cost of preparing, reviewing,
and delivering the releases or reconveyances.
Neither the acceptance of any payment nor the issuance of any
partial reconveyance or release by Lender shall affect Borrower's liability to
pay all amounts owing under this Agreement or the Lien of any Mortgage on the
remainder of the Eligible Real Property not reconveyed or released. Upon written
request of Lender and surrender of any Mortgage to the applicable trustee for
cancellation or endorsement, and upon payment of its fees and charges, said
trustee shall reconvey, without warranty, all or any part of the Eligible Real
Property then subject to the applicable Mortgage. Any reconveyance or release,
whether full or partial, may be made in terms to "the person or persons legally
entitled thereto," and the recitals in such reconveyance or release of any
matters or facts shall be conclusive proof of the truthfulness thereof.
SECTION 6. COLLATERAL ADMINISTRATION
6.1 General.
14.
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6.1.1 Location of Collateral. All Collateral, other than
Inventory in transit and motor vehicles, will at all times be kept by Borrower
and its Subsidiaries at one or more of the business locations set forth in
Schedule 6.1.1 attached hereto and shall not, without the prior written approval
of Lender, be moved therefrom except, prior to the occurrence and continuation
of an Event of Default and Lender's acceleration of the maturity of the
Obligations in consequence thereof, for (a) sales of Inventory in the ordinary
course of business, and (b) removals in connection with dispositions of Related
Equipment that are authorized by subsection 6.4.2 hereof.
6.1.2 Insurance of Collateral. Borrower shall maintain and
pay for insurance upon all Collateral wherever located and with respect to
Borrower's business, covering casualty, hazard, public liability, and such other
risks in such amounts and with such insurance companies as are reasonably
satisfactory to Lender. Borrower shall deliver the certified copies of such
policies to Lender with 438 BFU lender's loss payable endorsements or other
satisfactory lender's loss payable endorsements, naming Lender as sole loss
payee, assignee, or additional insured, as appropriate. Each policy of insurance
or endorsement shall contain a clause requiring the insurer to give not less
than 30 days prior written notice to Lender in the event of cancellation of the
policy for any reason whatsoever and a clause specifying that the interest of
Lender shall not be impaired or invalidated by any act or neglect of Borrower or
the owner of the Property or by the occupation of the premises for purposes more
hazardous than are permitted by said policy. If Borrower fails to provide and
pay for such insurance, Lender may, at its option, but shall not be required to,
procure the same and charge Borrower therefor. Borrower agrees to deliver to
Lender, promptly as rendered, true copies of all reports made in any reporting
forms to insurance companies.
6.1.3 Protection of Collateral. All expenses of
protecting, storing, warehousing, insuring, handling, maintaining, and shipping
the Collateral, any and all excise, property, sales, and use taxes imposed by
any state, federal, or local authority on any of the Collateral or in respect of
the sale thereof shall be borne and paid by Borrower. If Borrower fails to
promptly pay any portion thereof when due, Lender may, at its option, but shall
not be required to, pay the same and charge Borrower therefor. Lender shall not
be liable or responsible in any way for the safekeeping of any of the Collateral
or for any loss or damage thereto (except for reasonable care in the custody
thereof while any Collateral is in Lender's actual possession) or for any
diminution in the value thereof, but the same shall be at Borrower's sole risk.
6.2 Administration of Accounts, Payment General Intangibles, and
Rents.
6.2.1 Records, Schedules, and Assignments of Accounts.
Borrower shall keep accurate and complete records of its Accounts, payment
General Intangibles, and Rents that compose the Collateral and all payments and
collections thereon and shall submit to Lender on such periodic basis as Lender
shall request a sales and collections report for the preceding period, in form
satisfactory to Lender.
15.
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6.2.2 [intentionally omitted].
6.2.3 [intentionally omitted].
6.2.4 [intentionally omitted].
6.2.5 [intentionally omitted].
6.2.6 Collection of Collateral. All remittances received
by Borrower on account of Accounts, payment General Intangibles, and Rents
composing the Collateral, together with the proceeds of any other Collateral,
shall be held as Lender's property by Borrower as trustee of an express trust
for Lender's benefit. Lender retains the right at all times after the occurrence
and during the continuation of a Default or an Event of Default to notify
account debtors that such items of the Collateral have been assigned to Lender
and to collect such items of the Collateral directly in its own name and to
charge the collection costs and expenses, including attorneys fees, to Borrower.
6.3 Administration of Inventory.
6.3.1 Records and Reports of Inventory. Borrower shall
keep accurate and complete records of its Inventories that compose the
Collateral.
6.3.2 [intentionally omitted].
6.4 Administration of Equipment.
6.4.1 Records and Schedules of Equipment. Borrower shall
keep accurate records itemizing and describing the kind, type, quality,
quantity, and value of its Equipment that composes the Collateral and all
dispositions made in accordance with subsection 6.4.2 hereof, and shall furnish
Lender with a current schedule containing the foregoing information on at least
an annual basis and more often if requested by Lender. Immediately upon request
therefor by Lender, Borrower shall deliver to Lender any and all certificates of
title with respect to that portion of the Equipment that composes the Collateral
and that is subject to certificates of title.
6.4.2 Dispositions of Equipment. Borrower will not sell,
lease, or otherwise dispose of or transfer any of the Equipment (other than the
Unrelated Equipment) or any part thereof without the prior written consent of
Lender; provided, however, that the foregoing restriction shall not apply, for
so long as no Default or Event of Default exists, to (a) dispositions of such
Equipment which, in the aggregate during any consecutive twelve-month period,
has a fair market value or book value, whichever is less, of $50,000, or less,
provided that all proceeds thereof are remitted to Lender for application to the
Loans, or (b) replacements of such Equipment that is substantially worn,
damaged, or obsolete with Equipment of like kind, function, and value that does
not constitute Unrelated
16.
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Equipment, provided that the replacement Equipment shall be acquired prior to or
concurrently with any disposition of the Equipment that is to be replaced, the
replacement Equipment shall be free and clear of Liens other than Permitted
Liens that are not Purchase Money Liens, and Borrower shall have given Lender at
least 5 days prior written notice of such disposition.
6.5 Payment of Charges. All amounts chargeable to Borrower under
Section 6 hereof shall be Obligations secured by all of the Collateral, shall
charged by Lender as an advance to Borrower's Loan Account, and shall bear
interest from the date such advance was made until paid in full at the rate
applicable to Revolving Credit Loans from time to time.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties. In order to induce
Lender to enter into this Agreement, Borrower makes the following
representations and warranties which shall be true, correct, and complete in all
material respects as of the date hereof, and shall be true, correct, and
complete in all material respects as of the Closing Date, and at and as of the
date of the making of each Loan made hereafter, as though made on and as of the
date of such Loan (except to the extent that such representations and warranties
relate solely to an earlier date) and such representations and warranties shall
survive the execution and delivery of this Agreement:
7.1.1 Organization and Qualification. Borrower is a trust
duly organized, validly existing, and in good standing under the laws of the
State of California and that it has no Subsidiaries. Borrower is duly qualified
and is authorized to do business and is in good standing in each state or
jurisdiction listed on Schedule 7.1.1 attached hereto and in all other states
and jurisdictions where the character of its Properties or the nature of its
activities make such qualification necessary.
7.1.2 Power and Authority. Borrower is duly authorized and
empowered to enter into, execute, deliver, and perform this Agreement and each
of the other Loan Documents to which it is a party. The execution, delivery and
performance of this Agreement and each of the other Loan Documents have been
duly authorized by all necessary action and do not and will not (a) require any
consent or approval of the interestholders of Borrower, (b) contravene
Borrower's Declaration of Trust, (c) violate, or cause Borrower to be in default
under, any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award in effect having applicability to
Borrower, (d) result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease, or instrument to
which Borrower is a party or by which it or its Properties may be bound or
affected, or (e) result in, or require, the creation or imposition of any Lien
(other than Permitted Liens) upon or with respect to any of the Properties now
owned or hereafter acquired by Borrower.
17.
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7.1.3 Legally Enforceable Agreement. This Agreement is,
and each of the other Loan Documents to which it is a party, when delivered
under this Agreement will be, a legal, valid, and binding obligation of Borrower
enforceable against it in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally and subject to the
availability of equitable remedies, whether considered in a proceeding at law or
in equity.
7.1.4 Deferred Taxes. As of the Closing Date, the amount
of the Deferred Taxes is as set forth on Schedule 7.1.4.
7.1.5 Names. Borrower has not been known as or used any
fictitious or trade names except those listed on Schedule 7.1.5 attached hereto.
Except as set forth on Schedule 7.1.5 attached hereto, Borrower has not been the
surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person.
7.1.6 Business Locations; Agent for Process. Borrower's
chief executive office and other places of business are as listed on Schedule
7.1.6 attached hereto. During the preceding 1-year period, Borrower has not had
an office, place of business, or agent for service of process other than as
listed on Schedule 7.1.6 attached hereto. Except as shown on Schedule 7.1.6
attached hereto, no Inventory is stored with a bailee, warehouseman, or similar
party, nor is any Inventory consigned to any Person.
7.1.7 Title to Properties; Priority of Liens. Borrower has
good, indefeasible, and marketable title to and fee simple ownership of, or
valid and subsisting leasehold interests in, all of its real Property, and good
title to all of the Collateral, in each case, free and clear of all Liens except
Permitted Liens. Borrower has paid or discharged all lawful claims which, if
unpaid, might become a Lien against any of Borrower's Properties that is not a
Permitted Lien. The Liens granted to Lender under Section 5 hereof are first
priority Liens, subject only to Permitted Liens.
7.1.8 [intentionally omitted].
7.1.9 Related Equipment. The Related Equipment is in good
operating condition and repair, and all necessary replacements of and repairs
thereto shall be made so that the value and operating efficiency of the Related
Equipment shall be maintained and preserved, reasonable wear and tear and
depreciation excepted. Borrower will not permit any of the Related Equipment to
become affixed to any real Property leased to Borrower so that an interest
arises therein under the real estate laws of the applicable jurisdiction and
Borrower will not permit any of the Related Equipment to become an accession to
any personal Property other than Related Equipment that is subject to first
priority (except for Permitted Liens) Liens in favor of Lender.
18.
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7.1.10 Financial Statements; Fiscal Year. The balance
sheets of Borrower as of June 30, 1997 and the related statements of income,
changes in stockholder's equity, and changes in financial position for the
period ended on such date, have been prepared in accordance with GAAP, and
present fairly the financial position of Borrower at such date and the results
of Borrower's operations for such period. Since June 30, 1997 there has been no
material change in the condition, financial or otherwise, of Borrower and no
change in the aggregate value of Related Equipment and real Property owned by
Borrower, except changes in the ordinary course of business, none of which
individually or in the aggregate has been materially adverse. The fiscal year of
Borrower and each of its Subsidiaries ends on December 31st of each year.
7.1.11 Full Disclosure. The financial statements referred
to in subsection 7.1.10 hereof do not, nor does this Agreement or any other
written statement of Borrower to Lender, contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading. There is no fact which Borrower has failed to
disclose to Lender in writing which materially affects adversely or, so far as
Borrower can now foresee, will materially affect adversely the Properties,
business prospects, profits or condition (financial or otherwise) of Borrower or
any of its Subsidiaries, or the ability of Borrower or its Subsidiaries to
perform this Agreement or the other Loan Documents.
7.1.12 Solvent Financial Condition. Borrower is now and,
after giving effect to the Loans to be made hereunder, at all times will be,
Solvent.
7.1.13 Surety Obligations. Except as set forth on Schedule
7.1.13, Borrower is not obligated as surety or indemnitor under any surety or
similar bond or other contract issued or entered into any agreement to assure
payment, performance, or completion of performance of any undertaking or
obligation of any Person.
7.1.14 Taxes. Borrower's federal tax identification number
is ▇▇-▇▇▇▇▇▇▇. Borrower has filed all federal, state, and local tax returns and
other reports it is required by law to file and has paid, or made provision for
the payment of, all taxes, assessments, fees, levies, and other governmental
charges upon it, its income and Properties as and when such taxes, assessments,
fees, levies, and charges that are due and payable, unless and to the extent any
thereof are being actively contested in good faith and by appropriate
proceedings, and Borrower maintains reasonable reserves on its books therefor.
The provision for taxes on the books of Borrower is adequate for all years not
closed by applicable statutes and for its current fiscal year.
7.1.15 Brokers. There are no claims for brokerage
commissions, finder's fees, or investment banking fees in connection with the
transactions contemplated by this Agreement.
19.
26
7.1.16 Patents, Trademarks, Copyrights, and Licenses.
Borrower owns or possesses all the patents, trademarks, service marks, trade
names, copyrights, and licenses necessary for the present and planned future
conduct of its business without any known conflict with the rights of others.
All such patents, trademarks, service marks, trade names, copyrights, licenses,
and other similar rights are listed on Schedule 7.1.16 attached hereto.
7.1.17 Governmental Consents. Borrower has, and is in good
standing with respect to, all governmental consents, approvals, licenses,
authorizations, permits, certificates, inspections, and franchises necessary to
continue to conduct its business as heretofore or proposed to be conducted by it
and to own or lease and operate its Properties as now owned or leased by it.
7.1.18 Compliance with Laws. Borrower has duly complied
with, and its Properties, business operations and leaseholds are in compliance,
in each case, in all material respects, with, the provisions of all federal,
state, and local laws, rules, and regulations applicable to Borrower, its
Properties or the conduct of its business, and there have been no citations,
notices, or orders of noncompliance issued to Borrower under any such law, rule,
or regulation. Borrower has established and maintains an adequate monitoring
system to insure that it remains in compliance, in all material respects, with
all federal, state, and local laws, rules, and regulations applicable to it.
7.1.19 Restrictions. Borrower is not a party or subject to
any contract, agreement, or charter or other corporate restriction, which
materially and adversely affects its business or the use or ownership of any of
its Properties. Borrower is not a party or subject to any contract or agreement
which restricts its right or ability to incur the Indebtedness contemplated to
be provided by Lender hereunder.
7.1.20 Litigation. Except as set forth on Schedule 7.1.20
attached hereto, there are no actions, suits, proceedings, or investigations
pending, or, to the knowledge of Borrower, threatened against or affecting
Borrower that reasonably could be expected to have a material adverse effect on
Borrower or the business, operations, Properties, prospects, profits, or
condition of Borrower. Borrower is not in default with respect to any order,
writ, injunction, judgment, decree, or rule of any court, governmental authority
or arbitration board, or tribunal that reasonably could be expected to have a
material adverse effect on Borrower or the business, operations, Properties,
prospects, profits, or condition of Borrower.
7.1.21 No Defaults. No Default or Event of Default has
occurred and no condition exists which would, upon or after the execution and
delivery of this Agreement or Borrower's performance hereunder, constitute a
Default or an Event of Default. Borrower is not in default, and no event has
occurred and no condition exists which constitutes, or which with the passage of
time or the giving of notice or both would
20.
27
constitute, a default in the payment of any Indebtedness to any Person for Money
Borrowed involving $250,000 or greater.
7.1.22 Leases. Schedule 7.1.22(A) attached hereto is a
complete listing of all capitalized leases of Borrower and Schedule 7.1.22(B)
attached hereto is a complete listing of all operating leases of Borrower and
its Subsidiaries. Borrower is in full compliance with all of its obligations
under the terms of each of its respective capitalized and operating leases.
7.1.23 Pension Plans. Except as disclosed on Schedule
7.1.23 attached hereto, Borrower has no Plan. Borrower is in full compliance
with the requirements of ERISA and the regulations promulgated thereunder with
respect to each Plan. No fact or situation that could result in a material
adverse change in the financial condition of Borrower exists in connection with
any Plan. Borrower has no withdrawal liability in connection with a
Multiemployer Plan.
7.1.24 Trade Relations. Except as set forth on Schedule
7.1.24, there exists no actual or, to the best of Borrower's knowledge,
threatened termination, cancellation, or limitation of, or any modification or
change in, the business relationship between Borrower and any customer or any
group of customers whose purchases individually or in the aggregate are material
to the business of Borrower, or with any material supplier, and there exists no
present condition or state of facts or circumstances which would materially
affect adversely Borrower or prevent Borrower from conducting such business
after the consummation of the transaction contemplated by this Agreement in
substantially the same manner in which it has heretofore been conducted.
7.1.25 Labor Relations. Except as described on Schedule
7.1.25 attached hereto, Borrower is not a party to any collective bargaining
agreement. To the best of Borrower's knowledge, there are no material grievances
disputes or controversies with any union or any other organization of Borrower's
employees, or threats of strikes, work stoppages, or any asserted pending
demands for collective bargaining by any union or organization.
7.1.26 [intentionally omitted].
7.1.27 [intentionally omitted].
7.2 [intentionally omitted].
7.3 Survival of Representations and Warranties. All
representations and warranties of Borrower contained in this Agreement or any of
the other Loan Documents shall survive the execution, delivery, and acceptance
thereof by Lender and the parties thereto and the closing of the transactions
described therein or related thereto.
21.
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SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants. During the term of this Agreement,
and thereafter for so long as there are any Obligations to Lender, Borrower
covenants that, unless otherwise consented to by Lender in writing, it shall:
8.1.1 Visits and Inspections. Permit representatives of
Lender, from time to time, as often as may be reasonably requested, but only
during normal business hours, to visit and inspect the Properties of Borrower
and each of its Subsidiaries, inspect, audit, and make extracts from its books
and records, and discuss with its officers, its employees, and its independent
accountants, Borrower's and each of its Subsidiaries' business, assets,
liabilities, financial condition, business prospects, and results of operations;
provided, however, that so long as no Default or Event of Default has occurred
and is continuing, Lender agrees that it shall provide reasonable prior notice
of any such visit and inspection and that the number of such visits and
inspections shall not exceed 4 per year.
8.1.2 Notices. Promptly notify Lender in writing of the
occurrence of any event or the existence of any fact which renders any
representation or warranty in this Agreement or any of the other Loan Documents
inaccurate, incomplete, or misleading in any material respect.
8.1.3 Financial Statements. Keep, and cause each
Subsidiary to keep, adequate records and books of account with respect to its
business activities in which proper entries are made in accordance with GAAP
reflecting all its financial transactions, and cause to be prepared and
furnished to Lender the following (all to be prepared in accordance with GAAP
applied on a consistent basis, unless Borrower's certified public accountants
concur in any change therein and such change is disclosed to Lender and is
consistent with GAAP):
(a) not later than 90 days after the close of each
fiscal year of Borrower, unqualified audited financial statements
of Borrower and its Subsidiaries as of the end of such year, on a
Consolidated and consolidating basis, certified by a firm of
independent certified public accountants of recognized standing
selected by Borrower but acceptable to Lender (except for a
qualification for a change in accounting principles with which
the accountant concurs);
(b) not later than 35 days (45 days in the case of
a month that is the end of a fiscal quarter) after the end of
each month hereafter, including the last month of Borrower's
fiscal year, unaudited interim financial statements of Borrower
and its Subsidiaries as of the end of such month and of the
portion of Borrower's financial year then elapsed, on a
Consolidated and consolidating basis, certified by the chief
financial officer of Borrower
22.
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as prepared in accordance with GAAP and fairly presenting the
Consolidated financial position and results of operations of
Borrower and its Subsidiaries for such month and period subject
only to changes from audit and year-end adjustments and except
that such statements need not contain notes;
(c) promptly after the sending or filing thereof,
as the case may be, copies of any proxy statements, financial
statements, or reports which Borrower has made available to its
shareholders and copies of any regular, periodic, and special
reports or registration statements which Borrower files with the
Securities and Exchange Commission or any governmental authority
which may be substituted therefor, or any national securities
exchange;
(d) promptly after the filing thereof, copies of
any annual report required by ERISA to be filed in connection
with each Plan; and
(e) such other data and information (financial and
otherwise) as Lender, from time to time, reasonably may request,
bearing upon or related to the Collateral or Borrower's and each
of its Subsidiaries' financial condition or results of
operations.
Concurrently with the delivery of the financial statements
described in clause (a) of this subsection 8.1.3, Borrower shall forward to
Lender a copy of the accountants' letter to Borrower's management, if any, that
is prepared in connection with such financial statements. Concurrently with the
delivery of the financial statements described in clauses (a) and (b) of this
subsection 8.1.3, or more frequently if requested by Lender, Borrower shall
cause to be prepared and furnished to Lender a Compliance Certificate in the
form of Exhibit C-1 attached hereto executed by the chief financial officer of
Borrower.
8.1.4 Capital Expenditure Plans. No later than 10 days
prior to the beginning of each fiscal quarter of Borrower, deliver to Lender
projected Capital Expenditures to be made by Borrower during the forthcoming
fiscal quarter.
8.1.5 Projections. No later than 30 days prior to the end
of each fiscal year of Borrower deliver to Lender income statement Projections
of Borrower for the forthcoming 3 years, year by year, and for the forthcoming
fiscal year, month by month.
8.1.6 Collateral Reporting. Borrower shall deliver to
Lender on a monthly basis (and in any event within 35 days after the end of each
month), (a) a rental delinquency report, prepared on a per property basis with
respect to the Eligible Real Property, (b)(i) a Deferred Tax Certificate, and
(ii) as to non-Deferred Taxes, a report that details the amount of real property
taxes that currently are delinquent, those that currently are due and payable,
and those that are to become due and payable within twelve months of the date of
the report, such report to be prepared on a per Property basis with respect to
the Eligible Real Property, (c) a report that details those parcels of the
Eligible Real
23.
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Property that have been sold by Borrower within the last three months, the net
cash proceeds received therefrom, the application of such net cash proceeds,
those parcels of Eligible Real Property that currently are held for sale, the
listing price, and the length of time that such property has been held for sale,
(d) a report that details the NOI of each of the parcels of Eligible Real
Property, (e) a report that details the vacancy rate of each of the parcels of
Eligible Real Property, and (f) an income report relative to each of the
Eligible Hotel Real Property. In addition, from time to time hereafter, Borrower
shall deliver to Lender such other and additional information or documentation
as Lender reasonably may request.
8.1.7 Related Equipment. Make all necessary replacements
of and repairs to the Related Equipment so that the value and operating
efficiency thereof shall be maintained and preserved, depreciation and
reasonable wear and tear excepted.
8.2 Negative Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Lender, Borrower
covenants that, unless Lender has first consented thereto in writing, it will
not:
8.2.1 Mergers; Consolidations; Acquisitions. Merge or
consolidate, or permit any Subsidiary of Borrower to merge or consolidate, with
any Person, nor acquire, nor permit any of its Subsidiaries to acquire, all or
any substantial part of the Properties of any Person.
8.2.2 Loans. Make, or permit any Subsidiary of Borrower to
make, any loans or other advances of money (other than for salary, travel
advances, advances against commissions, and other similar advances in the
ordinary course of business) to any Person.
8.2.3 Total Indebtedness. Create, incur, assume, or suffer
to exist, or permit any Subsidiary of Borrower to create, incur, or suffer to
exist, any Indebtedness, except:
(a) Obligations owing to Lender;
(b) the Senior Mortgages, the Senior Notes, and
such other Indebtedness existing on the date of this Agreement as
is described on Schedule 8.2.3;
(c) Indebtedness of any Subsidiary of Borrower to
Borrower;
(d) accounts payable to trade creditors and current
operating expenses (other than for Money Borrowed) which are not
aged more than 120 days from billing date or more than 30 days
from the due date, in each case, incurred in the ordinary course
of business and paid within such time period,
24.
31
unless the same are being actively contested in good faith and by
appropriate and lawful proceedings; and Borrower or such
Subsidiary shall have set aside such reserves, if any, with
respect thereto as are required by GAAP and deemed adequate by
Borrower or such Subsidiary and its independent accountants;
(e) Obligations to pay Rentals permitted by
subsection 8.2.13 hereof;
(f) Permitted Purchase Money Indebtedness;
(g) contingent liabilities arising out of
endorsements of checks and other negotiable instruments for
deposit or collection in the ordinary course of business;
(h) Non-Recourse Indebtedness; and
(i) Indebtedness not included in paragraphs (a)
through (h) above that does not exceed at any time, in the
aggregate, the sum of $100,000; and
(j) refinancings, renewals, or extensions of
Indebtedness permitted under clauses (b), (f), (h), and (i) of
this subsection 8.2.3 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms
and conditions of such refinancings, renewals, or extensions do
not materially impair the prospects of repayment of the
Obligations by Borrower, (ii) the net cash proceeds of such
refinancings, renewals, or extensions do not result in an
increase in the aggregate principal amount of the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings,
renewals, refundings, or extensions do not result in a shortening
of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, and (iv) to the extent that
Indebtedness that is refinanced was subordinated in right of
payment to the Obligations, then the subordination terms and
conditions of the refinancing Indebtedness must be at least as
favorable to Lender as those applicable to the refinanced
Indebtedness.
8.2.4 Affiliate Transactions. Enter into, or be a party
to, or permit any Subsidiary of Borrower to enter into or be a party to, any
transaction with any Affiliate of Borrower or stockholder, except in the
ordinary course of and pursuant to the reasonable requirements of Borrower's or
such Subsidiary's business and upon fair and reasonable terms that are fully
disclosed to Lender and are no less favorable to Borrower than would obtain in a
comparable arm's length transaction with a Person not an Affiliate or
stockholder of Borrower or such Subsidiary.
25.
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8.2.5 Limitation on Liens. Create or suffer to exist, or
permit any Subsidiary of Borrower to create or suffer to exist, any Lien upon
any of its Property, income, or profits, whether now owned or hereafter
acquired, except:
(a) Liens at any time granted in favor of Lender;
(b) Liens for taxes (excluding any Lien imposed
pursuant to any of the provisions of ERISA) not yet due, or being
contested in the manner described in subsection 7.1.14 hereof,
but only if in Lender's judgment such Lien does not adversely
affect Lender's rights or the priority of Lender's Lien in the
Collateral;
(c) Liens arising in the ordinary course of
Borrower's business by operation of law or regulation, but only
if payment in respect of any such Lien is not at the time
required and such Liens do not, in the aggregate, materially
detract from the value of the Property of Borrower or materially
impair the use thereof in the operation of Borrower's business;
(d) Purchase Money Liens securing Permitted
Purchase Money Indebtedness;
(e) Liens securing Indebtedness of one of
Borrower's Subsidiaries to Borrower or another such Subsidiary;
(f) subject to the terms and conditions of the Lien
Subordination Agreement, the liens and security interests of the
Senior Notes Agent for the benefit of the Senior Noteholders;
(g) the Senior Mortgages and such other Liens as
appear on Schedule 8.2.5 attached hereto;
(h) Liens extant on the Closing Date securing the
Allowed Secured Real Property Tax Claims;
(i) Liens securing Non-Recourse Indebtedness, which
such Liens shall be limited to parcels of real Property (and
their related Accounts, Equipment, General Intangibles,
Inventory, and Rents) first acquired by Borrower after the
Closing Date; and
(j) such other Liens as Lender may hereafter
approve in writing.
8.2.6 [intentionally omitted].
26.
33
8.2.7 Distributions. Declare or make, or permit any
Subsidiary of Borrower to declare or make, any Distributions, including, without
limitation, Distributions on account of Borrower's Preferred Stock.
8.2.8 Capital Expenditures. (a) Make Capital Expenditures
(including, without limitation, by way of capitalized leases) which, in the
aggregate, exceed $12,000,000 during the period commencing on October 1, 1997
and ending on September 30, 2000, or (b) Make Capital Expenditures (including,
without limitation, by way of capitalized leases) related to the Properties of
Borrower that do not compose the Eligible Real Property which, in the aggregate,
exceed, during the term of this Agreement, $4,000,000 minus the amount of
prepayments made pursuant to subsection 8.2.15(a)(iv).
8.2.9 Disposition of Collateral. Sell, lease, or otherwise
dispose of any of, or permit any Subsidiary of Borrower to sell, lease, or
otherwise dispose any of, the Collateral, including any disposition of the
Collateral as part of a sale and leaseback transaction, to or in favor of any
Person, except Permitted Dispositions.
8.2.10 [intentionally omitted].
8.2.11 [intentionally omitted].
8.2.12 Restricted Investment. Make or have, or permit any
Subsidiary of Borrower to make or have, any Restricted Investment.
8.2.13 Leases. Become, or permit any of its Subsidiaries
to become, a lessee under any operating lease (other than a lease under which
Borrower or any of its Subsidiaries is lessor) of Property if the aggregate
Rentals payable during any current or future period of 12 consecutive months
under the lease in question and all other leases under which Borrower or any of
its Subsidiaries is then lessee would exceed $100,000. The term "Rentals" means,
as of the date of determination, all payments which the lessee is required to
make by the terms of any lease.
8.2.14 Tax Consolidation. File or consent to the filing of
any consolidated income tax return with any Person other than a Subsidiary of
Borrower.
8.2.15 Prepayments and Repayments.
(a) Except for (i) prepayments made with the proceeds of a
Permitted Real Property Disposition so long as any applicable conditions
contained in subsection 5.4 are met in connection therewith, (ii) prepayments
made with the proceeds of equity offerings, (iii) prepayments made with the
proceeds of refinancings permitted by subsection 8.2.3(j) hereof, and (iv)
prepayments in an amount equal to $4,000,000 minus the amount of Capital
Expenditures made pursuant to subsection 8.2.8(b) hereof, prepay any
27.
34
Indebtedness (including, without limitation, the Senior Mortgages and the Senior
Notes, but excluding the Obligations) owing to any third Person.
(b) Except as permitted by clause (a) above, from and
after July 1, 1998, make any payment on account of the Senior Notes; provided,
however, that, as of the end of any month and so long as no Triggering Event has
occurred and is continuing, Borrower shall be entitled to make payment of its
regularly scheduled payments of principal and interest then due (exclusive,
however, of any interest payments that previously were due and not paid) on the
Senior Notes.
(c) Anything in this Agreement (including, without
limitation, clauses (a) and (b) above) or the other Loan Documents to the
contrary notwithstanding, Borrower shall not make any payment on account of the
Senior Notes during any Earthquake Suspension Period.
(d) Borrower also shall not pay in cash any interest with
respect to Indebtedness as to which it has the contractual right to make such
payment by the issuance of additional promissory notes of the same kind.
8.2.16 Amendment of Certain Documents.
(a) Agree to any amendment to, or waive any of its rights
with respect to, the terms and provisions regarding interest rates, principal or
interest payment amounts, total principal amounts or the maturity of principal
amounts under the Senior Notes, the Senior Note Agreement, or any of the
agreements, or any amendments or waivers with respect to any of the foregoing,
without in each case obtaining the prior written consent of Lender to such
amendment or waiver.
(b) Alter, amend, or otherwise change or supplement any
term or condition contained in Borrower's Declaration of Trust relative to the
rights and preferences of the Preferred Stock in order to (i) provide for the
mandatory redemption thereof or mandatory dividends with respect thereto at any
time that any of the Obligations are outstanding or Lender has any commitment to
Borrower under any of the Loan Documents, or (ii) provide terms and conditions
that reasonably could be expected to have a material adverse effect on Borrower.
8.3 Specific Financial Covenants. During the term of this
Agreement, and thereafter for so long as there are any Obligations to Lender,
Borrower covenants that, unless otherwise consented to by Lender in writing, it
shall:
28.
35
8.3.1 [intentionally omitted].
8.3.2 Debt Service Coverage Ratio. Maintain, at the end of
each of the following fiscal periods, a Debt Service Coverage Ratio of not less
than the ratio shown below for the period corresponding thereto:
Period Ended Ratio
------------ -----
For the Trailing Six Month Period
ending June 30, 1998 1.0:1.0
For the Trailing Nine Month Period
ending September 30, 1998 1.0:1.0
For the Trailing Twelve Month Period
ending December 31, 1998 and ending
on the last day of each month thereafter 1.0:1.0
29.
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8.3.3 [intentionally omitted].
SECTION 9. CONDITIONS PRECEDENT TO INITIAL LOANS
Any other provision of this Agreement or any of the other Loan
Documents notwithstanding, and without affecting in any manner the rights of
Lender under the other sections of this Agreement, Lender shall not be required
to make any Loan under this Agreement unless and until each of the following
conditions has been and continues to be satisfied:
9.1 Documentation. Lender shall have received, in form and
substance satisfactory to Lender and its counsel, a duly executed copy of this
Agreement and the Loan Documents, together with such additional documents,
instruments, and certificates as Lender and its counsel shall require in
connection therewith from time to time, all in form and substance satisfactory
to Lender and its counsel.
9.2 Other Loan Documents. Each of the conditions precedent set
forth in the other Loan Documents shall have been satisfied.
9.3 Approvals and Consents. Borrower shall have received all
governmental consents, approvals, licenses, authorizations, permits,
certificates, inspections, and franchises necessary for the consummation of the
transactions contemplated by the Loan Documents.
9.4 Certified Documents of Borrower. On or before the Closing
Date, Borrower shall have delivered to Lender copies of the following documents,
duly certified, or the following certificates, as applicable:
(i) the Declaration of Trust, as amended, modified,
or supplemented to the Closing Date, certified by a senior officer of Borrower;
(ii) a certificate from a senior officer of
Borrower attesting to the resolutions of Borrower's Board of Trustees
authorizing its execution and delivery of all of the Loan Documents to which
Borrower is a party and authorizing specific officers of Borrower to execute
same;
(iii) a certificate from a senior officer of
Borrower as to the incumbency, and containing the specimen signature or
signatures, of the Person or Persons authorized to execute the Loan Documents to
which Borrower is a party on behalf of Borrower, together with evidence of the
incumbency of such Secretary; and
30.
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(iv) certificates of status or good standing of
Borrower from the Secretary of State of California and of each state or other
jurisdiction in which Borrower is qualified to do business, dated within 10 days
of the Closing Date.
9.5 Confirmation Searches. Lender shall have received searches
reflecting the filing of its financing statements and/or fixture filings with
respect to Borrower.
9.6 Opinion of Counsel. Lender shall have received from counsel
for Borrower a legal opinion in form and substance satisfactory to Lender and
its counsel.
9.7 Material Adverse Changes. No material adverse change shall
have occurred with respect to Borrower since June 30, 1997.
9.8 Pay-Off Letter and UCC Termination Statements, Etc. The
Existing Lender shall have executed and delivered the Pay-Off Letter, which
shall be in full force and effect, together with UCC termination statements,
mortgage releases, and other documentation evidencing the termination of its
Liens on the Properties of Borrower.
9.9 Mortgages. Mortgages with respect to the Eligible Real
Property shall have been recorded in the appropriate county recorder's office.
9.10 Title Insurance. Lender shall have received ALTA 1970 Form
Lenders Policies of Title Insurance in form and content acceptable to Lender
(including the absence of a survey exception), in its discretion, with respect
to each of the parcels of Eligible Real Property.
9.11 Due Diligence. Lender shall have received, reviewed, and
found acceptable copies of Borrower's rent rolls, franchise agreements,
certificates of occupancy, leases, and insurance policies. Lender also shall
have received verbal confirmation from Holiday Inns relative to the franchise
contracts relative to each of Borrower's Eligible Real Property locations in
Sacramento, Chico, and Walnut Creek, California that is operated as a Hotel
Property, such verbal confirmation providing information concerning any existing
defaults and an agreement that any such existing defaults would be waived until
June 30, 1998. To the extent required by Lender, Lender also shall have received
estoppel agreements from certain material lessees of Borrower's Eligible Real
Property.
9.12 Tax Servicing Contract. Lender shall have entered into a
tax servicing contract with a title company or other third Person in form and
substance satisfactory to Lender with respect to each of the parcels of Eligible
Real Property.
9.13 Availability. Lender shall have determined that immediately
after Lender has made the initial Loans contemplated hereby, and paid all
closing costs incurred in connection with the transactions contemplated hereby,
Availability shall not be less than $10,000,000.
31.
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9.14 Projections. Lender shall have received a set of
Projections as to the projected financial performance of Borrower through fiscal
year ended December 31, 1998. Such Projections shall be prepared on a
month-by-month basis. The Projections shall be in form and substance
satisfactory to Lender and certified by the chief financial officer of Borrower
as being such officer's good faith, best estimate of the financial performance
of Borrower during such period.
SECTION 9A. CONDITIONS PRECEDENT TO ALL LOANS
Any other provision of this Agreement or any of the other Loan
Documents notwithstanding, and without affecting in any manner the rights of
Lender under the other sections of this Agreement, Lender shall not be required
to make any Loans under this Agreement unless and until each of the following
conditions has been and continues to be satisfied:
9A.1 No Default. No Default or Event of Default shall exist.
9A.2 Representations and Warranties. The representations and
warranties contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects on and as of the date of such Loan
(except to the extent that such representations and warranties relate solely to
an earlier date).
9A.3 Adverse Changes. No material adverse change shall have
occurred with respect to Borrower.
9A.4 Injunctions. No injunction, writ, restraining order, or
other order of any nature prohibiting, directly or indirectly, the extension of
such credit shall have been issued and remain in force by any governmental
authority against Borrower, Lender, or any of their Affiliates.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default. The occurrence of one or more of the
following events shall constitute an "Event of Default":
10.1.1 [intentionally omitted].
10.1.2 Payment of Obligations. Borrower shall fail to pay
any principal amount of the Obligations on the due date thereof (whether due at
stated maturity, on demand, upon acceleration, or otherwise) or shall fail to
pay any other portion of the Obligations (whether consisting of interest, fees,
costs, or expenses) within 5 days of the
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due date thereof (whether due at stated maturity, on demand, upon acceleration,
or otherwise).
10.1.3 Misrepresentations. Any representation, warranty,
or other statement made or furnished to Lender by or on behalf of Borrower, or
any Subsidiary of Borrower, in this Agreement, any of the other Loan Documents,
or any instrument, certificate, or financial statement furnished in compliance
with or in reference thereto proves to have been false or misleading in any
material respect when made or furnished or when reaffirmed pursuant to
subsection 7.2 hereof.
10.1.4 Breach of Specific Covenants. Borrower shall fail
or neglect to perform, keep, or observe any covenant contained in subsections
5.2, 5.3, 8.1.1, 8.1.3, 8.1.4, 8.1.5, 8.1.6, 8.2 or 8.3 hereof on the date that
Borrower is required to perform, keep, or observe such covenant.
10.1.5 Breach of Other Covenants. (a) Borrower shall fail
or neglect to perform, keep, or observe any covenant contained in Section 6.1.1
of this Agreement and the breach of such other covenant is not cured to Lender's
satisfaction within 5 days after the sooner to occur of Borrower's receipt of
notice of such breach from Lender or the date on which such failure or neglect
first becomes known to any officer of Borrower, and (b) Borrower shall fail or
neglect to perform, keep, or observe any covenant contained in this Agreement
(other than a covenant that is dealt with specifically elsewhere in subsection
10.1 hereof) and the breach of such other covenant is not cured to Lender's
satisfaction within 20 days after the sooner to occur of Borrower's receipt of
notice of such breach from Lender or the date on which such failure or neglect
first becomes known to any officer of Borrower.
10.1.6 Default Under Security Documents/Other Agreements.
Any event of default shall occur and be continuing under, or Borrower shall
default in the performance or observance of any term, covenant, condition, or
agreement contained in, any of the Security Documents or the Other Agreements
and such default shall continue beyond any applicable grace period.
10.1.7 Other Defaults. There shall occur or exist any
default or event of default on the part of Borrower under any agreement,
document, or instrument respecting Indebtedness for Money Borrowed (exclusive of
Non-Recourse Indebtedness) in an amount of $250,000 or greater to which Borrower
is a party (including, without limitation, the Senior Notes and the Senior Note
Agreement) or by which Borrower or any of its Property is bound, if the result
of such default or event of default is to permit the third Person to such
agreement, document, or instrument the right to terminate same or accelerate the
obligations of Borrower thereunder.
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10.1.8 Uninsured Losses. Any material loss, theft, damage,
or destruction of any of the Collateral not fully covered (subject to such
deductibles as Lender shall have permitted) by insurance.
10.1.9 Adverse Changes. There shall occur any material
adverse change with respect to Borrower.
10.1.10 Insolvency and Related Proceedings. On or after
the Closing Date, Borrower shall cease to be Solvent or shall suffer the
appointment of a receiver, trustee, custodian, or similar fiduciary, or shall
make an assignment for the benefit of creditors, or any petition for an order
for relief shall be filed by or against Borrower under the Bankruptcy Code (if
against Borrower, the continuation of such proceeding for more than 30 days), or
Borrower shall make any offer of settlement, extension, or composition to its
unsecured creditors generally.
10.1.11 Business Disruption; Condemnation. There shall
occur a cessation of a substantial part of the business of Borrower, or any
Subsidiary of Borrower, for a period which materially, adversely affects
Borrower's or such Subsidiary's capacity to continue its business, on a
profitable basis; or Borrower, or any Subsidiary of Borrower, shall suffer the
loss or revocation of any license or permit now held or hereafter acquired by
Borrower or such Subsidiary which is necessary to the continued or lawful
operation of its business; or Borrower or any Subsidiary of Borrower shall be
enjoined, restrained, or in any way prevented by court, governmental, or
administrative order from conducting all or any material part of its business
affairs.
10.1.12 Change of Control. A Change of Control shall
occur.
10.1.13 ERISA. A Reportable Event shall occur which
Lender, in its sole discretion, shall determine in good faith constitutes
grounds for the termination by the Pension Benefit Guaranty Corporation of any
Plan or for the appointment by the appropriate United States district court of a
trustee for any Plan, or if any Plan shall be terminated or any such trustee
shall be requested or appointed, or if Borrower, or any Subsidiary of Borrower,
is in "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan resulting from Borrower's, or such
Subsidiary's, complete or partial withdrawal from such Plan.
10.1.14 Challenge to Agreement. Borrower, or any
Subsidiary of Borrower, or any Affiliate of any of them, shall challenge or
contest in any action, suit, or proceeding the validity or enforceability of
this Agreement, or any of the other Loan Documents, the legality or
enforceability of any of the Obligations, or the perfection or priority of any
Lien granted to Lender.
10.1.15 [intentionally omitted].
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10.1.16 Criminal Forfeiture. Borrower, any Subsidiary of
Borrower, shall be criminally convicted under any law that could lead to a
forfeiture of any of the Collateral.
10.1.17 Judgments. One or more judgments in an aggregate
amount in excess of $250,000 shall have been rendered against Borrower and such
judgments remain undischarged, unpaid, or unstayed for a period of 30 days after
such judgment or judgments become final and non-appealable.
10.1.18 Loss of Hotel Franchise. There shall occur a
termination or other loss of any franchise agreement of Borrower with the
franchisor of any item of Eligible Hotel Real Property (including, without
limitation, any of those parcels of real Property identified as items (f), (g),
or (h) on Schedule E-1) and such franchise agreement is not replaced by
Borrower, within 180 days of such termination or other loss, with a franchise
agreement in respect of such item of Eligible Hotel Real Property with a
franchisor of a comparable or better franchise.
10.2 Acceleration of the Obligations. Without in any way
limiting the right of Lender to demand payment of any portion of the Obligations
payable on demand in accordance with subsection 3.2 hereof, upon or at any time
after the occurrence of an Event of Default, all or any portion of the
Obligations shall, at the option of Lender and without presentment, demand,
protest, or further notice by Lender, become at once due and payable, and
Borrower forthwith shall pay to Lender the full amount of such Obligations;
provided that, upon the occurrence of an Event of Default specified in
subsection 10.1.10 hereof, all of the Obligations shall become automatically due
and payable without declaration, notice, or demand by Lender.
10.3 Other Remedies. Upon and after the occurrence of an Event
of Default, in addition to the rights and remedies provided for under the
Mortgages, Lender shall have and may exercise from time to time the following
rights and remedies:
10.3.1 All of the rights and remedies of a secured party
under the Code or under other applicable law, and all other legal and equitable
rights to which Lender may be entitled, all of which rights and remedies shall
be cumulative and shall be in addition to any other rights or remedies contained
in this Agreement or any of the other Loan Documents, and none of which shall be
exclusive.
10.3.2 The right to take immediate possession of the
Collateral, and to (a) require Borrower to assemble the Collateral, at
Borrower's expense, and make it available to Lender at a place designated by
Lender which is reasonably convenient to both parties, and (b) enter any
premises where any of the Collateral shall be located and to keep and store the
Collateral on said premises until sold (and if said premises be the Property of
Borrower, Borrower agrees not to charge Lender for storage thereof).
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10.3.3 The right to sell or otherwise dispose of all or
any Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by law, in lots or in bulk, for cash or on credit, all as Lender, in
its sole discretion, may deem advisable. Borrower agrees that 10 days written
notice to Borrower of any public or private sale or other disposition of
Collateral shall be reasonable notice thereof, and such sale shall be at such
locations as Lender may designate in said notice. Lender shall have the right to
conduct such sales on Borrower's premises, without charge therefor, and such
sales may be adjourned from time to time in accordance with applicable law.
Lender shall have the right to sell, lease, or otherwise dispose of the
Collateral, or any part thereof, for cash, credit, or any combination thereof,
and Lender may purchase all or any part of the Collateral at public or, if
permitted by law, private sale and, in lieu of actual payment of such purchase
price, may set off the amount of such price against the Obligations. The
proceeds realized from the sale of any Collateral may be applied, after allowing
2 Business Days for collection, (a) first, to the reasonable costs, expenses,
and attorneys fees incurred by Lender in collecting the Obligations, in
enforcing the rights of Lender under the Loan Documents and in collecting,
retaking, completing, protecting, removing, storing, advertising for sale,
selling, and delivering any Collateral, (b) second, to the interest due upon any
of the Obligations, and (c) third, to the principal of the Obligations. If any
deficiency shall arise, Borrower shall remain liable to Lender therefor.
10.3.4 Lender is hereby granted a license or other right
to use, without charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks, and advertising matter, or any
Property of a similar nature as it pertains to the Collateral, in advertising
for sale and selling any Collateral, and Borrower's rights under all licenses
and all franchise agreements shall inure to Lender's benefit.
10.3.5 [intentionally omitted].
10.4 Remedies Cumulative; No Waiver. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings of
Borrower contained in this Agreement and the other Loan Documents, or in any
document referred to herein or contained in any agreement supplementary hereto
or contained in any other agreement between Lender and Borrower, heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and not
in derogation or substitution of any of the terms, covenants, conditions, or
agreements of Borrower contained herein. The parties expressly understand and
agree that Lender shall be entitled to exercise each and all of its rights and
remedies provided for in the Mortgages in accordance with their terms and
conditions. The failure or delay of Lender to require strict performance by
Borrower of any provision of this Agreement or to exercise or enforce any
rights, Liens, powers, or remedies hereunder or under any of the aforesaid
agreements or other documents or security or Collateral shall not operate as a
waiver of such performance, Liens, rights, powers, and remedies, but all such
requirements, Liens, rights, powers, and remedies shall continue in
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full force and effect until all Loans and all other Obligations owing or to
become owing from Borrower to Lender shall have been fully satisfied. None of
the undertakings, agreements, warranties, covenants, and representations of
Borrower contained in this Agreement or any of the other Loan Documents, and no
Event of Default by Borrower under this Agreement or any other Loan Documents
shall be deemed to have been suspended or waived by Lender, unless such
suspension or waiver is by an instrument in writing specifying such suspension
or waiver and is signed by a duly authorized representative of Lender and
directed to Borrower.
SECTION 11. MISCELLANEOUS
11.1 Power of Attorney. Borrower hereby irrevocably designates,
makes, constitutes, and appoints Lender (and all Persons designated by Lender)
as Borrower's true and lawful attorney (and agent-in- fact), and Lender, or
Lender's agent, may, without notice to Borrower and in either Borrower's or
Lender's name, but at the cost and expense of Borrower:
11.1.1 At such time or times upon or after the occurrence
and during the continuation of a Default or an Event of Default as Lender or
said agent, in its sole discretion, may determine, endorse Borrower's name on
any checks, notes, acceptances, drafts, money orders. or any other evidence of
payment or proceeds of the Collateral which come into the possession of Lender
or under Lender's control.
11.1.2 At such time or times upon or after the occurrence
and during the continuation of an Event of Default as Lender or its agent, in
its sole discretion may determine, Lender may: (a) [intentionally omitted], (b)
[intentionally omitted], (c) [intentionally omitted], (d) [intentionally
omitted], (e) [intentionally omitted], (f) [intentionally omitted], (g) endorse
the name of Borrower upon any of the items of payment or proceeds relating to
any Collateral and deposit the same to the account of Lender on account of the
Obligations, (h) [intentionally omitted], (i) [intentionally omitted], (j) use
the information recorded on or contained in any data processing equipment and
computer hardware and software relating to any of the Collateral, (k) make and
adjust claims under policies of insurance, and (l) do all other acts and things
necessary, in Lender's determination, to fulfill Borrower's obligations under
this Agreement.
11.2 Indemnity. Borrower hereby agrees to indemnify Lender and
hold Lender harmless from and against any liability, loss, damage, suit, action,
or proceeding ever suffered or incurred by Lender (including reasonable
attorneys fees and legal expenses) as the result of Borrower's failure to
observe, perform, or discharge Borrower's duties hereunder. In addition,
Borrower shall defend Lender against and save it harmless from all claims of any
Person with respect to the Collateral. Without limiting the generality of the
foregoing, these indemnities shall extend to any claims asserted against Lender
by any Person under any Environmental Laws or similar laws by reason of
Borrower's or any other Person's failure to comply with laws applicable to solid
or hazardous waste materials or
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other toxic substances. Any provision in this Agreement to the contrary
notwithstanding, the obligation of Borrower under this subsection 11.2 shall (a)
not apply to any liability, loss, damage, suit, action, or proceeding that
arises as a proximate result of the gross negligence or wilful misconduct of
Lender or its agents, and (b) survive the payment in full of the Obligations and
the termination of this Agreement.
11.3 Modification of Agreement; Sale of Interest. This Agreement
may not be modified, altered, or amended, except by an agreement in writing
signed by Borrower and Lender. Borrower may not sell, assign, or transfer any
interest in this Agreement, any of the other Loan Documents, or any of the
Obligations, or any portion thereof, including, without limitation, Borrower's
rights, title, interests, remedies, powers, and duties hereunder or thereunder.
Subject to obtaining the prior written consent of Borrower as to the proposed
assignee, transferee, or participant (which such consent shall not be
unreasonably withheld, delayed, or conditioned), Borrower hereby consents to
Lender's participation, sale, assignment, transfer, or other disposition, at any
time or times hereafter, of this Agreement and any of the other Loan Documents,
or of any portion hereof or thereof, including, without limitation, Lender's
rights, title, interests, remedies, powers, and duties hereunder or thereunder.
In the case of an assignment, the assignee shall have, to the extent of such
assignment, the same rights, benefits, and obligations as it would if it were
"Lender" hereunder, and Lender shall be relieved of all obligations hereunder
upon any such assignments. Borrower agrees that it will use its best efforts to
assist and cooperate with Lender in any manner reasonably requested by Lender to
effect the sale of participations in or assignments of any of the Loan Documents
or any portion thereof or interest therein, including, without limitation,
assisting in the preparation of appropriate disclosure documents. Borrower
further agrees that Lender may disclose credit information regarding Borrower
and its Subsidiaries to any potential participant or assignee.
11.4 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
11.5 Successors and Assigns. This Agreement, the Other
Agreements, and the Security Documents shall be binding upon and inure to the
benefit of the successors and assigns of Borrower and Lender permitted under
subsection 11.3 hereof.
11.6 Cumulative Effect; Conflict of Terms. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in subsection 3.2
hereof and except as otherwise provided in any of the other Loan Documents by
specific reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
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11.7 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts taken together shall constitute but
one and the same instrument.
11.8 Notice. Except as otherwise provided herein, all notices,
requests, and demands to or upon a party hereto, to be effective, shall be in
writing and shall be sent by certified or registered mail, return receipt
requested, by personal delivery against receipt, by overnight courier or by
facsimile and, unless otherwise expressly provided herein, shall be deemed to
have been validly served, given, or delivered immediately when delivered against
receipt, 1 Business Day after deposit in the mail, postage prepaid, or with an
overnight courier or, in the case of facsimile notice, when sent, addressed as
follows:
If to Lender: FLEET CAPITAL CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration Manager
Facsimile No.: 818.382.4291
With a copy to: ▇▇▇▇▇▇▇, PHLEGER & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ Hilson, Esq.
Facsimile No.: 213.239.1324
If to Borrower: THE PEREGRINE REAL ESTATE TRUST
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: 916.929.1122
With a copy to: MILBANK, TWEED, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: 213.629.5063
or to such other address as each party may designate for itself by notice given
in accordance with this subsection 11.8; provided, however, that any notice,
request, or demand to or upon Lender pursuant to subsections 3.1.1 or 4.2.2
hereof shall not be effective until received by Lender.
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11.9 Lender's Consent. Whenever Lender's consent or approval is
required to be obtained under this Agreement, any of the Other Agreements, or
any of the Security Documents as a condition to any action, inaction, condition,
or event, Lender shall be authorized to give or withhold such consent in its
discretion and to condition its consent or approval upon the giving of
additional collateral security for the Obligations, the payment of money, or any
other matter.
11.10 Credit Inquiries. Borrower hereby authorizes and permits
Lender to respond to usual and customary credit inquiries from third parties
concerning Borrower or any of its Subsidiaries.
11.11 Certain Matters of Construction. The terms "herein,"
"hereof," and "hereunder," and other words of similar import refer to this
Agreement as a whole and not to any particular section, subsection, paragraph,
or subdivision. Any pronoun used herein shall be deemed to cover all genders.
The section titles, table of contents, and list of exhibits appear as a matter
of convenience only and shall not affect the interpretation of this Agreement.
All references to statutes and related regulations shall include any amendments
of same and any successor statutes and regulations. All references to any of the
Loan Documents shall include any and all modifications and supplements thereto
and any and all extensions or renewals thereof. All terms contained in this
Agreement shall have the meanings provided for by the Code to the extent the
same are used or defined therein.
11.12 Entire Agreement. This Agreement and the other Loan
Documents, together with all other instruments, agreements, and certificates
executed by the parties in connection therewith or with reference thereto,
embody the entire understanding and agreement between the parties hereto and
thereto with respect to the subject matter hereof and thereof and supersede all
prior agreements, understandings, and inducements, whether express or implied,
oral or written.
11.13 Interpretation. No provision of this Agreement or any of
the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
11.14 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN
NEGOTIATED, EXECUTED, AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
LOS ANGELES, CALIFORNIA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT IF
ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN
CALIFORNIA, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER, AND
PROCEDURE FOR FORECLOSURE OF LENDER'S LIEN UPON SUCH COLLATERAL AND THE
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ENFORCEMENT OF LENDER'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE
EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT
WITH THE LAWS OF CALIFORNIA. AS PART OF THE CONSIDERATION FOR NEW VALUE
RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF
BUSINESS OF BORROWER OR LENDER, EACH OF LENDER AND BORROWER HEREBY CONSENTS AND
AGREES THAT EITHER THE SUPERIOR COURT OF LOS ANGELES, CALIFORNIA OR THE UNITED
STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER AND LENDER PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF
OR RELATED TO THIS AGREEMENT. EACH OF LENDER AND BORROWER EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH OF LENDER AND BORROWER HEREBY WAIVES ANY OBJECTION THAT IT
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE, OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH OF LENDER AND BORROWER HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT, AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT, AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE OTHER
AT ITS ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER
DEPOSIT IN THE U.S. MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF LENDER OR BORROWER TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY LENDER OR BORROWER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY
OTHER APPROPRIATE FORUM OR JURISDICTION.
11.15 WAIVERS. (A) EACH OF LENDER AND BORROWER WAIVES THE RIGHT
TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS, OR THE
COLLATERAL, (B) BORROWER WAIVES PRESENTMENT, DEMAND, AND PROTEST AND NOTICE OF
PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION, OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS,
CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER, AND GUARANTIES AT ANY
TIME HELD BY LENDER ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY
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RATIFIES AND CONFIRMS WHATEVER LENDER MAY DO IN THIS REGARD, (C) TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, BORROWER WAIVES NOTICE PRIOR TO TAKING
POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE
REQUIRED BY ANY COURT PRIOR TO ALLOWING LENDER TO EXERCISE ANY OF LENDER'S
REMEDIES, (D) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER WAIVES
THE BENEFIT OF ALL VALUATION, APPRAISEMENT, AND EXEMPTION LAWS, AND (E) BORROWER
WAIVES NOTICE OF ACCEPTANCE HEREOF. BORROWER ACKNOWLEDGES THAT THE FOREGOING
WAIVERS BY IT ARE A MATERIAL INDUCEMENT TO LENDER AGREEING TO ENTER INTO THIS
AGREEMENT AND THAT LENDER IS RELYING UPON THE FOREGOING WAIVERS BY BORROWER IN
ITS FUTURE DEALINGS WITH BORROWER. BORROWER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
[remainder of page intentionally left blank]
42.
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IN WITNESS WHEREOF, this Agreement has been duly executed in Los
Angeles, California, on the day and the year specified at the beginning of this
Agreement.
THE PEREGRINE REAL ESTATE TRUST, a
California real estate trust
By [SIG]
-------------------------------
Title President/CEO
------------------------------
ACCEPTED IN Los Angeles, California
FLEET CAPITAL CORPORATION,
a Rhode Island corporation
By [SIG]
-------------------------------
Title Vice President
-----------------------------
43.
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APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of December
4, 1997 by and between FLEET CAPITAL CORPORATION and THE PEREGRINE REAL ESTATE
TRUST, the following terms shall have the following meanings (terms defined in
the singular to have the same meaning when used in the plural and vice versa):
Account Debtor - any Person who is or may become obligated under
or on account of an Account.
Accounts - all accounts, contract rights, chattel paper,
instruments and documents, whether now owned or hereafter created or
acquired by Borrower or in which Borrower now has or hereafter acquires
any interest.
Adjusted Net Earnings From Operations - with respect to any
fiscal period, means the net earnings (or loss) after provision for
income taxes for such fiscal period of a Person as reflected on the most
recent financial statement of such Person supplied to Lender, but
excluding:
(i) any gain (or loss) arising from the sale of
capital assets;
(ii) any gain (or loss) arising from any write-up
(or write-down) of assets;
(iii) earnings (or loss) of any corporation,
substantially all the assets of which have been acquired in any manner
by such Person or its Subsidiaries, realized by such corporation prior
to the date of such acquisition;
(iv) net earnings of any business entity in which
such Person has less than a 100% ownership interest unless such net
earnings shall have actually been received by such Person in the form of
cash distributions;
(v) the earnings (or loss) of any third Person to
which any assets of such Person or its Subsidiaries shall have been
sold, transferred or disposed of, or into which such Person or one of
its Subsidiaries shall have merged, or been a party to any consolidation
or other form of reorganization, prior to the date of such transaction;
(vi) any gain (or loss) arising from the
acquisition of any Securities of such Person or its Subsidiaries, and
51
(vii) any gain (or loss) arising from extraordinary
or non-recurring items.
Affiliate - a Person (other than a Subsidiary):(a) which directly
or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, a Person; (b) which
beneficially owns or holds 5% or more of any class of the Voting Stock
of a Person; or (c) 5% or more of the Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by a Person or a Subsidiary of a
Person.
Agreement - the Loan and Security Agreement referred to in the
first sentence of this Appendix A, all Exhibits thereto and this
Appendix A.
Allowed Secured Real Property Tax Claim - shall have the meaning
ascribed it in the Reorganization Plan.
Appraised Value - the net low-end market value of an item of
Eligible Real Property based upon the most recent appraisal conducted by
Lender or by an appraisal company selected by Lender.
Availability - the amount of money that Borrower is entitled to
borrow from time to time as Revolving Credit Loans, such amount being
the difference derived when (a) the sum of the principal amount of
Revolving Credit Loans then outstanding (including any amounts that
Lender may have paid for the account of Borrower pursuant to any of the
Loan Documents and that have not been reimbursed by Borrower) is
subtracted from (b) the lesser of (i) the Borrowing Base, or (ii) the
Maximum Amount. If the amount determined under clause (a) hereof is
equal to or greater than the Borrowing Base or the Maximum Amount,
Availability is 0.
Bank - Fleet National Bank, N.A.
Bankruptcy Court - the United States Bankruptcy Court for the
Eastern District of California.
Base Rate - the rate of interest announced or quoted by Bank from
time to time as its prime rate for commercial loans, whether such rate
is the lowest rate charged by Bank to its most preferred borrowers, and,
if such prime rate for commercial loans is discontinued by Bank as a
standard, a comparable reference rate designated by Bank as a substitute
therefor shall be the Base Rate.
Base Rate Election - the election of Borrower, in writing
received by Lender or deemed under section 2.3 of the Agreement, to have
the interest on all or any
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portion of the principal amount of the Revolving Credit Loans be based
on a Base Rate.
Base Rate Portion - a Base Rate Revolving Credit Portion.
Base Rate Revolving Credit Portion - that portion of the
Revolving Credit Loans that is not subject to a LIBOR Election.
Borrowing Base - as at any date of determination, an amount equal
to the result of (a) 50% of the Borrowing Base Value of Eligible Real
Property that is Eligible Non-Hotel Real Property, plus (b) the lesser
of (i) 50% of the Borrowing Base Value of Eligible Real Property that is
Eligible Hotel Real Property, or (ii) 120% of the sum of clause (a) and
clause (b)(i), minus (c) until the satisfaction, in full, of the
Environmental Condition, $2,000,000.
Borrowing Base Value - as at any date of determination, and with
respect to any parcel of Eligible Real Property, the Appraised Value of
such parcel of Eligible Real Property minus the amount of Deferred Taxes
payable by Borrower with respect to such parcel of Eligible Real
Property.
Business Day - (a) when used with respect to the LIBOR Election,
shall mean a day on which dealings may be effected in deposits of United
States Dollars in the London interbank foreign currency deposits market
and on which Lender is conducting and other banks may conduct business
in London, England, or in the State of California, and (b) when used
with respect to any other provision of the Agreement, any day excluding
Saturday, Sunday, and any day which is a legal holiday under the laws of
the State of California or is a day on which banking institutions
located in such state are closed.
Capital Expenditures - expenditures made or liabilities incurred
for the acquisition of any fixed assets or improvements, replacements,
substitutions, or additions thereto that have a useful life of more than
1 year, including the total principal portion of Capitalized Lease
Obligations.
Capitalized Lease Obligation - any Indebtedness represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
Cash Flow - for any measuring period, (a) Adjusted Net Earnings
From Operations of Borrower, plus (b) amortization, depreciation, and
other non-cash items of Borrower, plus (c) all taxes paid or accrued by
Borrower, plus (d) all interest accrued on account of the Senior
Mortgages, the Senior Notes, the Obligations, and all other
Indebtedness; determined on a Consolidated basis in accordance with
GAAP.
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Change of Control - a "person" or "group" (within the meaning of
Sections 13(d) and 14(d) (2) of the Securities Exchange Act of 1934
(exclusive, however, of The Prudential Insurance Company of America,
Oaktree Capital Management, LLC, or Trust Company of the West, or their
respective Affiliates or funds or trusts as to which they provide
controlling management or agency services) becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of 50% or more of the total voting power
of all classes of stock then outstanding of Borrower normally entitled
to vote in the election of directors.
Closing Date - the date on which all of the conditions precedent
in Sections 9 and 9A of the Agreement are satisfied and the initial Loan
is made.
Code - the Uniform Commercial Code as adopted and in force in the
State of California as from time to time in effect, except that in those
circumstances where the California Commercial Code requires the
application of the Uniform Commercial Code of another jurisdiction, the
term Code shall refer to the Uniform Commercial Code as enacted in such
jurisdiction.
Collateral - all of the Property and interests in Property
described in Section 5 of the Agreement, and all other Property and
interests in Property that now or hereafter secure the payment and
performance of any of the Obligations.
Confirmation Order - the order of the Bankruptcy Court confirming
the Reorganization Plan pursuant to section 1129 of the Bankruptcy Code
entered by the Bankruptcy Court on August 8, 1994.
Consolidated - the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
Current Assets - at any date means the amount at which all of the
current assets of a Person would be properly classified as current
assets shown on a balance sheet at such date in accordance with GAAP
except that amounts due from Affiliates and investments in Affiliates
shall be excluded therefrom.
Declaration of Trust - that certain Declaration of Trust of
Commonwealth Equity Trust dated July 31, 1973, as amended from time to
time.
Debt Service - for any measuring period, the sum of (a) scheduled
amortization of principal and interest on Indebtedness of Borrower due
to be paid during such period , (b) the product of (i) $30,000 (which
amount constitutes the good faith estimate by Borrower of the monthly
Capital Expenditures incurred by Borrower in connection with the
maintenance of Borrower's Properties and which amount Borrower and
Lender have agreed to use solely for purposes of calculating
4.
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Debt Service hereunder) times (ii) the number of months in such
measuring period, and (c) all cash taxes paid by Borrower, in each case,
determined on a Consolidated basis in accordance with GAAP.
Debt Service Coverage Ratio - for any measuring period, the ratio
of (a) Cash Flow, for such measuring period, to (b) Debt Service, for
such measuring period.
Default - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an Event
of Default.
Default Rate - as defined in subsection 2.1.2 of the Agreement.
Deferred Taxes - as at any date of determination, an amount equal
to the then owing Allowed Secured Real Property Tax Claims (including
penalties and interest with respect thereto) owed by Borrower with
respect to the Eligible Real Property.
Deferred Tax Certificate - a certificate signed by the chief
financial officer of Borrower that details, on a parcel by parcel basis,
the amount of Deferred Taxes owed by Borrower with respect to the
Eligible Real Property as of the date of the certificate.
Distribution - in respect of any corporation means and includes:
(a) the payment of any dividends or other distributions on capital stock
of the corporation (except distributions in such stock), and (b) the
redemption or acquisition of Securities unless made contemporaneously
from the net proceeds of the sale of Securities.
Earthquake Loss - any loss of or damage to any of Borrower's
Eligible Real Property or improvements thereon caused by earthquake and
occurring after the Closing Date.
Earthquake Material Loss - any Earthquake Loss that is material
to Borrower.
Earthquake Suspension Period - with respect to any Earthquake
Loss that reasonably (from the perspective of a secured lender) could be
expected to constitute an Earthquake Material Loss or that Borrower
acknowledges in writing to constitute an Earthquake Material Loss, the
period commencing on the date such loss or damage first occurs and
ending on the earliest to occur of: (a) the date such lost or damaged
Property is replaced, repaired, or restored to Lender's reasonable
satisfaction; (b) the date (if ever) that Lender otherwise agrees in
writing to be the end of the Earthquake Suspension Period; and (c) the
date (if ever) that Lender receives the results of a reappraisal of the
Eligible Real Property and determines therefrom that no Overadvance
would exist in respect of a re-established Borrowing
5.
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Base based on such reappraisal and on the occurrence of such Earthquake
Loss; and (d) in respect of any parcel of Eligible Real Property that
Borrower and Lender agree in writing to have been the subject of an
Earthquake Material Loss, the date (if ever) that Borrower permanently
removes such item of Eligible Real Property from the Borrowing Base by
delivering irrevocable written notice of such removal to Lender and,
concurrently therewith, repaying any Overadvance that would result from
such removal (and such removed parcel of real Property thereafter shall
no longer constitute Eligible Real Property).
EBIT - with respect to any fiscal period, the sum of Borrower's
(a) Adjusted Net Earnings From Operations, plus (b) interest expense,
plus (c) taxes; determined on a Consolidated basis in accordance with
GAAP.
EBITDA - with respect to any fiscal period and with respect to
Borrower, (a) EBIT, plus (b) amortization, depreciation, and other
non-cash items; as determined on a Consolidated basis and in accordance
with GAAP.
Eligible Real Property - each of the parcels of real Property
identified on Schedule E-1 hereto for so long as, with respect to any
particular parcel, Borrower continues to own such parcel.
Eligible Hotel Real Property - Eligible Real Property that is
composed, in whole or in part, of a hotel, motel, or other similar
business.
Eligible Non-Hotel Real Property - Eligible Real Property that is
not Eligible Hotel Real Property.
Encumbered Real Property - the Eligible Real Property.
Environmental Condition - the receipt by Lender of Environmental
Reports respecting the Identified Properties.
Environmental Indemnity - an environmental indemnity executed by
Borrower in favor of Lender, the form and substance of which shall be
satisfactory to Lender.
Environmental Laws - all federal, state, and local laws, rules,
regulations, ordinances, programs, permits, guidances, orders, and
consent decrees relating to health, safety, and environmental matters
and applicable to the Collateral.
Environmental Reports - an environmental report or reports
related to a parcel of Eligible Real Property in form, scope, and
substance (including the remediation of environmental concerns
identified in prior reports), and from environmental consultants
retained for such reports, satisfactory to Lender, in its discretion.
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Equipment - all machinery, apparatus, equipment, fittings,
furniture, fixtures, motor vehicles, and other tangible personal
Property (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower or in which Borrower has an
interest, whether now owned or hereafter acquired by Borrower and
wherever located, and all parts, accessories and special tools and all
increases and accessions thereto and substitutions and replacements
therefor.
ERISA - the Employee Retirement Income Security Act of 1974, as
amended, and all rules and regulations from time to time promulgated
thereunder.
Event of Default - as defined in subsection 10.1 of the
Agreement.
Existing Lender - Foothill Capital Corporation.
GAAP - generally accepted accounting principles in the United
States of America in effect from time to time.
General Intangibles - all personal property of Borrower
(including things in action) other than goods, Accounts, chattel paper,
documents, instruments, and money, whether now owned or hereafter
created or acquired by Borrower.
Holiday Inns - Holiday Inns, Inc. and Holiday Inns Franchising,
Inc.
Indebtedness - as applied to a Person means, without duplication:
(a) all items which in accordance with GAAP would be
included in determining total liabilities as shown on the
liability side of a balance sheet of such Person as at the date
as of which Indebtedness is to be determined, including, without
limitation, Capitalized Lease Obligations,
(b) all obligations of another Person which would
constitute Indebtedness of such other Person under another clause
of this definition which have been guaranteed by the Person whose
Indebtedness is being calculated,
(c) all reimbursement obligations in connection with
letters of credit or letter of credit guaranties issued for the
account of such Person, and
(d) in the case of Borrower (without duplication), the
Obligations.
Identified Properties - those parcels of real Property identified
as items (l), (m), and (n) of the definition of Eligible Closing Date
Real Property.
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Interest Deferral Notes - the promissory notes to be delivered by
Borrower to each Senior Noteholder pursuant to the interest deferral
provisions of the Senior Note Agreement.
Inventory - all of Borrower's inventory, whether now owned or
hereafter acquired, including, but not limited to, all goods intended
for sale or lease by Borrower, or for display or demonstration, all work
in process, all raw materials and other materials and supplies of every
nature and description used or which might be used in connection with
the manufacture, printing, packing, shipping, advertising, selling,
leasing or furnishing of such goods or otherwise used or consumed in
Borrower's business, and all documents evidencing and General
Intangibles relating to any of the foregoing, whether now owned or
hereafter acquired by Borrower.
Legal Requirement - any requirement imposed upon Lender by any
law of the United States of America or the United Kingdom or by any
regulation, order, interpretation, ruling, or official directive
(whether or not having the force of law) of the Board, the Bank of
England, or any other board, central bank-or governmental or
administrative agency, institution or authority of in the United States
of America, the United Kingdom, or any political subdivision of either
thereof.
LIBOR Election - the option granted pursuant to subsection 2.4 of
the Agreement to have the interest on all or any portion of the
principal amount of the Revolving Credit Loans be based on a LIBOR Rate.
LIBOR Interest Payment Date - with respect to any LIBOR Portion,
the last day of each calendar month during the applicable LIBOR Period.
LIBOR Period - any period of 1 month, 2 months, 3 months, or 6
months commencing on a Business Day, selected as provided in subsection
2.3(a) of the Agreement; provided, however, that no LIBOR Period shall
extend beyond the last day of the Original Term or any Renewal Term
unless Borrower and Lender have agreed to an extension of the Original
Term or Renewal Term, whichever is applicable, beyond the expiration of
the LIBOR Period in question. If any LIBOR Period so selected shall end
on a date that is not a Business Day, such LIBOR Period shall instead
end on the next preceding or succeeding Business Day as determined by
Lender in accordance with the then current banking practice in London;
provided that Borrower shall not be required to pay double interest,
even though the preceding LIBOR Period ends and the new LIBOR Period
begins on the same day. Each determination by Lender of the LIBOR Period
shall, in the absence of manifest error, be conclusive.
LIBOR Portion - a LIBOR Revolving Credit Portion.
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LIBOR Rate - with respect to any LIBOR Portion for the related
LIBOR Period, an interest rate per annum (rounded upwards, if necessary,
to the next higher 1/8 of 1% equal to the product of (a) the Base LIBOR
Rate (as hereinafter defined) multiplied by (b) Statutory Reserves. For
purposes of this definition, the term "Base LIBOR Rate" shall mean the
rate (rounded to the nearest 1/8 of 1% or, if there is not nearest 1/8
of 1%, the next higher 1/8 of 1%) at which deposits of U.S. dollars
approximately equal in principal amount to the LIBOR Revolving Credit
Portion specified in the applicable LIBOR Request are offered to Lender
by prime banks in the London interbank foreign currency deposits market
at approximately 11:00 a.m., London time, 2 Business Days prior to the
commencement of such LIBOR Period, for delivery on the first day of such
LIBOR Period. Each determination by Lender of any LIBOR Rate shall, in
the absence of manifest error, be conclusive.
LIBOR Request - a notice in writing (or by telephone confirmed by
telex, telecopy, or other facsimile transmission on the same day as the
telephone request) from Borrower to Lender requesting that interest on a
Revolving Credit Loan be based on the LIBOR Rate, specifying: (a) the
first day of the LIBOR Period, (b) the length of the LIBOR Period
consistent with the definition of that term, and (c) the dollar amount
of the LIBOR Portion consistent with the definition of such terms.
LIBOR Revolving Credit Portion - that portion of the Revolving
Credit Loans specified in a LIBOR Request (including any portion of
Revolving Credit Loans that is being borrowed by Borrower concurrently
with such LIBOR Request) that is not less than $1,000,000 and is an
integral multiple of $100,000 that does not exceed the outstanding
balance of Revolving Credit Loans not already subject to a LIBOR
Election and, that, as of the date of the LIBOR Request specifying such
LIBOR Revolving Credit Portion, has met the conditions for basing
interest on the LIBOR Rate in subsection 2.1.1(b) of the Agreement.
Lien - any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether
such interest is based on common law, statute, or contract. The term
"Lien" also shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases,
and other title exceptions and encumbrances affecting Property. For the
purpose of the Agreement, a Person shall be deemed to be the owner of
any Property which it has acquired or holds subject to a conditional
sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for
security purposes.
Lien Subordination Agreement - that certain Subordination
Agreement, dated on or before the Closing Date, between Lender and
Senior Notes Agent, relative to the priority of the Liens of the parties
thereto in and to the Eligible Real Property, the form and substance of
which shall be satisfactory to Lender.
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Loan Account - the loan account established on the books of
Lender pursuant to subsection 3.6 of the Agreement.
Loan Documents - the Agreement, the Other Agreements, and the
Security Documents.
Loans - all loans and advances of any kind made by Lender
pursuant to the Agreement.
Maximum Amount - as of any date of determination, the lesser of
(a) $20,000,000, as may be reduced from time to time pursuant to
subsection 3.8 hereof, or (b) an amount equal to 2 times the outstanding
principal balance of the Senior Notes.
Money Borrowed - means (a) Indebtedness arising from the lending
of money by any Person to Borrower; (b) Indebtedness, whether or not in
any such case arising from the lending by any Person of money to
Borrower, (i) which is represented by notes payable or drafts accepted
that evidence extensions of credit, (ii) which constitutes obligations
evidenced by bonds, debentures, notes or similar instruments, or (iii)
upon which interest charges are customarily paid (other than accounts
payable) or that was issued or assumed as full or partial payment for
Property; (c) Indebtedness that constitutes a Capitalized Lease
Obligation; (d) reimbursement obligations with respect to letters of
credit or guaranties of letters of credit; and (e) Indebtedness of
Borrower under any guaranty of obligations that would constitute
Indebtedness for Money Borrowed under clauses (a) through (c) hereof, if
owed directly by Borrower.
Mortgages - the deeds of trust to be executed by Borrower on or
before the Closing Date in favor of Lender and by which Borrower shall
grant and convey for the benefit of Lender, as security for the
Obligations, a Lien upon all of the Eligible Real Property.
Multiemployer Plan - has the meaning set forth in Section
4001(a)(3) of ERISA.
NOI - with respect to a particular parcel of the Eligible Real
Property, the positive number by which the sum of all revenues generated
by such real Property exceeds the sum of all operating expenses
(exclusive of debt service and general and administrative expenses)
relative to such real Property.
Non-Recourse Indebtedness - Indebtedness of Borrower which is not
a general obligation of Borrower, but instead the right of recovery of
the obligee thereof is limited to a parcel of real Property (and its
related Accounts, Equipment, General Intangibles, Inventory, and Rents)
first acquired by Borrower after the Closing Date.
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Obligations - all Loans and all other advances, debts,
liabilities, obligations, covenants, and duties, together with all
interest, fees, and other charges owing, arising, due or payable from
Borrower to Lender of any kind or nature, present or future, whether or
not evidenced by any note, guaranty, or other instrument, whether
arising under the Agreement or any of the Loan Documents or otherwise
whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now
existing or hereafter arising, and however acquired.
Original Term - as defined in subsection 4.1 of the Agreement.
Other Agreements - the Environmental Indemnity, the Lien
Subordination Agreement, and any and all agreements, instruments, and
documents (other than the Agreement and the Security Documents),
heretofore, now or hereafter executed by Borrower, any Subsidiary of
Borrower, or any other third party and delivered to Lender in respect of
the transactions contemplated by the Agreement.
Other Real Property - the parcels of real Property identified on
Schedule O-1 attached hereto.
Overadvance - the amount, if any, by which the outstanding
principal amount of Revolving Credit Loans exceeds the lesser of (a) the
Borrowing Base or (b) the Maximum Amount.
Pay-Off Letter - a letter, in form and substance satisfactory to
Lender, from the Existing Lender respecting the amount necessary to
repay in full all of the obligations of Borrower owing to the Existing
Lender and to obtain a termination or release of all of the Liens
existing in favor of the Existing Lender in and to the Properties of
Borrower.
Permitted Dispositions - (a) Permitted Ordinary Course
Dispositions, and (b) Permitted Real Property Dispositions.
Permitted Liens - any Lien of a kind specified in subsection
8.2.5 of the Agreement.
Permitted Ordinary Course Dispositions - (a) sales of Inventory
in the ordinary course of business for so long as no Event of Default
exists hereunder, (b) a transfer of Property to Borrower by a Subsidiary
of Borrower, or (c) sales or other dispositions, in the ordinary course
of business, of Equipment that is substantially worn, damaged, or
obsolete.
Permitted Purchase Money Indebtedness - Purchase Money
Indebtedness of Borrower incurred after the date hereof which is secured
by a Purchase Money Lien
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and which, when aggregated with the principal amount of all other such
Indebtedness and Capitalized Lease Obligations of Borrower at the time
outstanding, does not exceed $100,000. For the purposes of this
definition, the principal amount of any Purchase Money Indebtedness
consisting of capitalized leases shall be computed as a Capitalized
Lease Obligation.
Permitted Real Property Disposition - (a) the sale or other
disposition of one or more of the parcels composing the Eligible Real
Property so long as, in connection therewith, each of the conditions set
forth in subsection 5.4 hereof are satisfied in full, (b) so long as no
Default or Event of Default has occurred and is continuing, the sale or
other disposition of one or more of the Other Real Properties (and the
Unrelated Equipment, Unrelated Inventory, Unrelated Accounts, Unrelated
General Intangibles, and Unrelated Rents in respect thereof) for fair
value, and (c) so long as no Default or Event of Default has occurred
and is continuing, the sale or other disposition of one or more of the
Senior Mortgage Real Properties (and the Unrelated Equipment, Unrelated
Inventory, Unrelated Accounts, Unrelated General Intangibles, and
Unrelated Rents in respect thereof) for fair value.
Person - an individual, partnership, corporation, limited
liability company, joint stock company, land trust, business trust, or
unincorporated organization, or a government or agency or political
subdivision thereof.
Personal Property Collateral - the Related Equipment, Related
Inventory, Related Accounts, Related General Intangibles, and Related
Rents with respect to the Eligible Real Property.
Plan - an employee benefit plan now or hereafter maintained for
employees of Borrower that is covered by Title IV of ERISA.
Preferred Stock - the preferred stock of Borrower, including,
without limitation, the "Preferred Stock" as defined in and sold under
that certain Preferred Stock Purchase Agreement, dated as of October 1,
1994, by and among Borrower and the buyers named therein.
Principal Notes - the original promissory notes delivered by
Borrower to each Senior Noteholder pursuant to the Senior Note
Agreement.
Projections - Borrower's forecasted (a) balance sheets, (b)
profit and loss statements, (c) cash flow statements, and (d)
capitalization statements, all prepared on a consistent basis with
Borrower's historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.
Property - any interest in any kind of property or asset, whether
real, personal, or mixed, or tangible or intangible.
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Purchase Money Indebtedness - means and includes (a) Indebtedness
(other than the Obligations) for the payment of all or any part of the
purchase price of any fixed assets, (b) any Indebtedness (other than the
Obligations) incurred at the time of or within 10 days prior to or after
the acquisition of any fixed assets for the purpose of financing all or
any part of the purchase price thereof, and (c) any renewals,
extensions, or refinancings thereof, but not any increases in the
principal amounts thereof outstanding at the time.
Purchase Money Lien - a Lien upon fixed assets that secures
Purchase Money Indebtedness, but only if (a) such Lien shall at all
times be confined solely to the fixed assets the purchase price of which
was financed through the incurrence of the Purchase Money Indebtedness
secured by such Lien, and (b) the subject fixed assets are either (i)
readily removable factory or office machines, (ii) not fixtures or
improvements to the Eligible Real Property, or (iii) not so integrated
into Eligible Real Property that their removal will result in a material
diminution in the Appraised Value of the subject Eligible Real Property.
Related Accounts - all of Borrower's present or future Accounts
relating to, or arising out of, Borrower's ownership, management, or
operation of the Eligible Real Property or any business conducted
thereon.
Related Equipment - all of Borrower's present or future Equipment
relating to, or arising out of, Borrower's ownership, management, or
operation of the Eligible Real Property or any business conducted
thereon.
Related General Intangibles - means all of Borrower's present or
future General Intangibles relating to, or arising out of, Borrower's
ownership, management, or operation of the Eligible Real Property or any
business conducted thereon.
Related Inventory - all of Borrower's present or future Inventory
relating to, or arising out of, Borrower's ownership, management, or
operation of the Eligible Real Property or any business conducted
thereon.
Related Rents - all of Borrower's Rents relating to, or arising
out of, Borrower's ownership, management, or operation of the Eligible
Real Property or any business conducted thereon.
Rents - all of Borrower's present or future rents, issues,
profits, royalties, and other income derived from any lease, sublease,
franchise agreement, license, or concession or other agreement affecting
all or any portion of Borrower's real Property or any business conducted
thereon.
Rentals - as defined in subsection 8.2.13 of the Agreement.
13.
63
Renewal Terms - as defined in subsection 4.1 of the Agreement.
Reorganization Plan - Borrower's Third Amended Plan of
Reorganization, as modified, that was approved by the Bankruptcy Court
pursuant to the Confirmation Order.
Reportable Event - any of the events set forth in Section 4043(b)
of ERISA.
Restricted Investment - any investment made in cash or by
delivery of Property to any Person, whether by acquisition of stock,
Indebtedness or other obligation or Security, or by loan, advance or
capital contribution, or otherwise, or in any Property except the
following:
(a) investments in one or more Subsidiaries of Borrower to
the extent existing on the Closing Date;
(b) Property to be used in the ordinary course of
business;
(c) Current Assets arising from the sale of goods and
services in the ordinary course of business of Borrower and its
Subsidiaries;
(d) investments in direct obligations of the United States
of America, or any agency thereof or obligations guaranteed by
the United States of America, provided that such obligations
mature within 1 year from the date of acquisition thereof;
(e) investments in certificates of deposit maturing within
1 year from the date of acquisition issued by a bank or trust
company organized under the laws of the United States or any
state thereof having capital surplus and undivided profits
aggregating at least $100,000,000; and
(f) investments in commercial paper given the highest
rating by a national credit rating agency and maturing not more
than 270 days from the date of creation thereof.
Revolving Credit Loan - a Loan made by Lender as provided in
subsection 1.1 of the Agreement.
Security - shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
Security Documents - the Mortgages and all other instruments and
agreements now or at any time hereafter securing the whole or any part
of the Obligations.
14.
64
Senior Mortgages - the Indebtedness described on Schedule S-1
attached hereto that, in each case, as applicable, is secured by the
applicable Senior Mortgage Real Property identified with respect to each
such item of Indebtedness.
Senior Mortgage Real Property - the parcels of real Property
identified on Schedule S-2 attached hereto.
Senior Note Agreement - that certain Second Amended and Restated
Note Agreement, dated as of September 27, 1994, by and among Borrower,
the Senior Notes Agent, and each of the Senior Noteholders.
Senior Noteholders - those Persons who hold Senior Notes as of
any date of determination.
Senior Notes - the Interest Deferral Notes and the Principal
Notes.
Senior Notes Agent - The Prudential Insurance Company of America,
as the agent or collateral agent for the Senior Noteholders, or any
Person that becomes a successor Senior Notes Agent.
Solvent - as to any Person, such Person (a) owns Property whose
fair saleable value is greater than the amount required to pay all of
such Person's Indebtedness (including contingent debts), (b) is able to
pay all of its Indebtedness as such Indebtedness matures, and (c) has
capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage.
Statutory Reserves - a fraction (expressed as a decimal) the
numerator of which is the number 1, and the denominator of which is the
number 1 minus the aggregate of the maximum reserve percentages
(including, without limitation, any marginal, special, emergency, or
supplemental reserves), expressed as a decimal, established by the Board
of Governors of the Federal Reserve System and any other banking
authority to which Bank or any Lender is subject for Eurocurrency
Liabilities (as defined in Regulation D of the Board of Governors of the
Federal Reserve System or any successor thereto). Such reserve
percentages shall include, without limitation, those imposed under such
Regulation D. LIBOR Portions shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exceptions, or
offsets which may be available from time to time to Bank or any Lender
under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any
reserve percentages.
Subsidiary - any corporation of which a Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the
Voting Stock at the time of determination.
15.
65
Tax - in relation to any LIBOR Portion and the applicable LIBOR
Rate, any tax, levy, impost, duty, deduction, withholding, or charges of
whatever nature required by any Legal Requirement to be (a) paid by
Lender and/or (b) withheld or deducted from any payment otherwise
required hereby to be made by Borrower to Lender; provided that the term
"Tax" shall not include any taxes imposed upon the net income of Lender
by the United States of America, United Kingdom, or any political
subdivision thereof.
Total Credit Facility - $20,000,000.
Trailing Nine Month Period - as of the last day of any fiscal
month, the fiscal month ended on such date and the eight immediately
preceding fiscal months (treated as a single accounting period).
Trailing Six Month Period - as of the last day of any fiscal
month, the fiscal month ended on such date and the five immediately
preceding fiscal months (treated as a single accounting period).
Trailing Twelve Month Period - as of the last day of any fiscal
month, the fiscal month ended on such date and the eleven immediately
preceding fiscal months (treated as a single accounting period).
Triggering Event - any one or more of the following: (a) an Event
of Default arising under subsection 10.1.2 (Payment of Obligations)
hereof; (b) Borrower shall fail or neglect to perform, keep, or observe
any covenant contained in subsections 8.2.8 (Capital Expenditures),
8.2.15 (Prepayments and Repayments), or 8.3 (Specific Financial
Covenants) hereof on the date that Borrower is required to perform,
keep, or observe such covenant; (c) an Event of Default arising under
subsection 10.1.10 (Insolvency and Related Proceedings) hereof; (d) an
Event of Default arising under subsection 10.1.12 (Change of Control)
hereof; and (e) Borrower shall fail or neglect to perform, keep, or
observe any covenant contained in subsections 8.1.3 (Financial
Statements), 8.1.4 (Capital Expenditure Plans), 8.1.5 (Projections), or
8.1.6 (Collateral Reporting) hereof and the breach of such covenant is
not cured to Lender's satisfaction within 30 days after the sooner to
occur of Borrower's receipt of notice of such breach from Lender or the
date on which such failure or neglect first becomes known to any officer
of Borrower.
Unencumbered Real Property - all real Property of Borrower other
than the Eligible Real Property, including, without limitation, the
Senior Mortgage Real Property and the Other Real Property.
Unrelated Accounts - all of Borrower's present or future Accounts
relating to, or arising out of, Borrower's ownership, management, or
operation of the Unencumbered Real Property or any business conducted
thereon.
16.
66
Unrelated Equipment - all of Borrower's present or future
Equipment relating to, or arising out of, Borrower's ownership,
management, or operation of the Unencumbered Real Property or any
business conducted thereon.
Unrelated General Intangibles - means all of Borrower's present
or future General Intangibles relating to, or arising out of, Borrower's
ownership, management, or operation of the Unencumbered Real Property or
any business conducted thereon.
Unrelated Inventory - all of Borrower's present or future
Inventory relating to, or arising out of, Borrower's ownership,
management, or operation of the Unencumbered Real Property or any
business conducted thereon.
Unrelated Rents - all of Borrower's present or future rents,
issues, profits, royalties, and other income derived from any lease,
sublease, franchise agreement, license, or concession or other agreement
affecting all or any portion of the Unencumbered Real Property or any
business conducted thereon.
Voting Stock - Securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors
(or Persons performing similar functions).
Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the
Code to the extent the same are used or defined therein.
17.
67
LIST OF SCHEDULES AND EXHIBITS
Schedule 6.1.1 Collateral Locations
Schedule 7.1.1 Jurisdictions in which Borrower and each Subsidiary is
Authorized to do Business
Schedule 7.1.4 Deferred Taxes
Schedule 7.1.5 Fictitious or Trade Names
Schedule 7.1.6 Business Locations
Schedule 7.1.13 Surety Obligations
Schedule 7.1.16 Patents, Trademarks, Copyrights and Licenses
Schedule 7.1.20 Litigation
Schedule 7.1.22(A) Capitalized Leases
Schedule 7.1.22(B) Operating Leases
Schedule 7.1.23 Pension Plans
Schedule 7.1.24 Trade Relations
Schedule 7.1.25 Labor Contracts
Schedule 8.2.3 Indebtedness
Schedule 8.2.5 Permitted Liens
Schedule E-1 Eligible Real Property
Schedule O-1 Other Real Property
Schedule S-1 Senior Mortgages
Schedule S-2 Senior Mortgage Real Property
Exhibit C-1 Compliance Certificate
68
SCHEDULE 6.1.1
COLLATERAL LOCATIONS
PROPERTY NAME ADDRESS COUNTY APN NO'S.
------------- ------- ------ ---------
TGI Friday's ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. Sacramento 243-0060-040-0000
Citrus Heights, CA
Burbank Mini-Storage ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Sonoma 125-091-031-000
Santa Rosa, CA Formerly APN 125-091-028-000
Downtown Mini-Storage ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 009-0217-001-0000
Sacramento, CA Personal Property Taxes Only
Property Is Ground Leased
From CalTrans
16th & K Street 1600 K Street Sacramento 006-0124-001-0000
Sacramento, CA
One Sunrise ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ 072-0430-054-0000
11492 & ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ 072-0430-056-0000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 225-0944-033-0000
Sacramento, CA
Town Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Los Angeles ▇▇▇▇-▇▇▇-▇▇▇
Signal Hill, CA ▇▇▇▇-▇▇▇-▇▇▇
Parkway Center ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ 108-250-46-1-0
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ Trade Center (Trade Center A)11135 Trade Center Drive Sacramento 072-0222-021-0000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Trade Center (Trade Center C)11167 Trade Center Drive Sacramento 072-0222-033-0000
Rancho Cordova, CA
▇▇▇▇▇▇▇ Service Center ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ Contra Costa 171-070-011-1
Walnut Creek, CA
Holiday Inn - Sacramento Northeast ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 228-0143-018-0000
Sacramento, CA 228-0143-023-0000
Holiday Inn - Chico ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇-▇▇▇
▇▇▇▇▇, ▇▇
Holiday Inn - Walnut Creek ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ Contra Costa 171-070-039-2
Walnut Creek, CA
69
SCHEDULE 7.1.1
JURISDICTIONS IN WHICH BORROWER
IS AUTHORIZED TO DO BUSINESS
NAME OF ENTITY JURISDICTIONS
-------------- -------------
The Peregrine Real Estate Trust State of California
70
SCHEDULE 7.1.4
DEFERRED TAXES (PRE-PETITION REAL PROPERTY TAXES)
PRINCIPAL
BALANCE OF
PRE-PETITION
TAXES AS OF
PROPERTY NAME ADDRESS APN NO'S. 12/2/1997
------------- ------- --------- ---------
Collateral Pool Properties:
TGI Friday's ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. 243-0060-040-0000 $ -
Citrus Heights, CA
Burbank Mini-Storage ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 125-091-031-000 $ 29,531.30
Santa Rosa, CA Formerly APN 125-091-028-000
Downtown Mini-Storage ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 009-0217-001-0000 $ -
Sacramento, CA Personal Property Taxes Only
Property Is Ground Leased
From CalTrans
16th & K ▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ 006-0124-001-0000 $ 89,483.02
Sacramento, CA
One Sunrise ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. 072-0430-054-0000 $ 36,640.70
11492 & ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 072-0430-055-0000 $ 14,985.76
Rancho Cordova, CA 072-0430-056-0000 $ 7,941.19
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ 225-0944-033-0000 $ 16,886.22
Sacramento, CA
Town Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇-▇▇▇-▇▇▇/▇▇▇▇-▇▇▇-▇▇▇ $130,885.64
Signal Hill, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 108-250-46-1-0 $ 1,127.68
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ Trade Center (Trade Center A) 11135 Trade Center Drive 072-0222-021-0000 $102,316.13
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Trade Center (Trade Center C) 11167 Trade Center Drive 072-0222-033-0000 $ 27,493.42
Rancho Cordova, CA
▇▇▇▇▇▇▇ Service Center ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ 171-070-011-1 $ 10,249.78
Walnut Creek, CA
Holiday Inn - Sacramento Northeast ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 228-0143-018-0000 $ -
Sacramento, CA 228-0143-023-0000 $ -
▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 006-240-022-000 $ 43,456.94
Chico, CA
Holiday Inn - Walnut Creek ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ 171-070-039-2 $ -
Walnut Creek, CA
-----------
Total Pre-Petition Real Property Taxes - Collateral Pool Properties $510,997.78
-----------
Page 1 of 2
71
Schedule 7.1.4
DEFERRED TAXES (PRE-PETITION REAL PROPERTY TAXES)
PRINCIPAL
BALANCE OF
PRE-PETITION
TAXES AS OF
PROPERTY NAME ADDRESS APN NO'S. 12/2/1997
------------- ------- --------- ---------
Non-Collateral Pool Properties:
Regency Plaza Shopping Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 243-0020-036-0000 $ -
Citrus Heights, CA 243-0020-041-0000 $ -
243-0020-047-0000 $ -
Sunrise Hills Shopping Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. 243-0060-039-0000 $ -
Citrus Heights, CA 243-0060-041-0000 $ -
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇ ▇▇▇▇ ▇▇▇▇. 295-0381-003-0000 $ -
Sacramento, CA
▇▇▇▇▇▇ ▇▇▇▇▇ Office Park I ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ 285-0130-019-0000 $ -
Sacramento, CA
▇▇▇▇▇▇ ▇▇▇▇▇ Office Park II 2025, 2035 & ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ 285-0130-002-0000 $ 19,908.18
Sacramento, CA
Commerce Street ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 118-310-008-6 $ -
Corona, CA
Consumer Circle ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 118-310-025-1 $ -
Corona, CA
Pomona Road ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 118-310-026-2 $ -
Corona, CA
-----------
Total Pre-Petition Real Property Taxes - Non-Collateral Pool Properties $ 19,908.18
-----------
Total Pre-Petition Real Property Taxes $ 530,905.96
============
Page 2 of 2
72
SCHEDULE 7.1.5
CORPORATE NAMES
1. BORROWER'S CORRECT NAME, AS REGISTERED WITH THE SECRETARY OF STATE OF THE
STATE OF CALIFORNIA IS:
The Peregrine Real Estate Trust
2. IN THE CONDUCT OF ITS BUSINESS, BORROWER HAS USED THE FOLLOWING NAMES:
The Peregrine Real Estate Trust
Commonwealth Equity Trust ("CET")
Also see Schedule 7.1.6A
73
SCHEDULE 7.1.6
BUSINESS LOCATIONS
1. BORROWER CURRENTLY HAS THE FOLLOWING BUSINESS LOCATIONS, AND NO OTHERS:
CHIEF EXECUTIVE OFFICE:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
OTHER LOCATIONS:
See Listing of Business Locations by Property at 7.1.6(A)
2. BORROWER MAINTAINS ITS BOOKS AND RECORDS RELATING TO ACCOUNTS, RENTS, AND
GENERAL INTANGIBLES AT:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
3. BORROWER HAS HAD NO OFFICE, PLACE OF BUSINESS OR AGENT FOR PROCESS LOCATED
IN ANY COUNTY OTHER THAN AS SET FORTH ABOVE, EXCEPT:
None
4. THE FOLLOWING BAILEES, WAREHOUSEMAN, SIMILAR PARTIES AND CONSIGNEES HOLD
INVENTORY OF BORROWER OR ONE OF ITS SUBSIDIARIES:
N/A - No bailees, warehouseman, similar parties or consignees used to hold
Inventory
74
SCHEDULE 7.1.6(A)
BUSINESS LOCATIONS BY PROPERTY
PROPERTY NAME ADDRESS APN NO'S.
------------- ------- ---------
Collateral Pool Properties:
TGI Friday's ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
Burbank Mini-Storage ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ Formerly APN 125-091-028-000
Downtown Mini-Storage ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 009-0217-001-0000
Sacramento, CA Personal Property Taxes Only
Property Is Ground Leased
From CalTrans
16th & K Street ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
One Sunrise ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. 072-0430-054-0000
11492 & ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ 072-0430-056-0000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
Town Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇-▇▇▇-▇▇▇/▇▇▇▇-▇▇▇-▇▇▇
Signal Hill, CA
Parkway Center ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 108-250-46-1-0
El ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ Trade Center (Trade Center A) 11135 Trade Center Drive 072-0222-021-0000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Trade Center (Trade Center C) ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ Service Center ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ 171-070-011-1
Walnut Creek, CA
Holiday Inn - Sacramento Northeast ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 228-0143-018-0000
Sacramento, CA 228-0143-023-0000
▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 006-240-022-000
Chico, CA
Holiday Inn - Walnut Creek ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ 171-070-039-2
Walnut Creek, CA
Page 1 of 2
75
SCHEDULE 7.1.6(A)
BUSINESS LOCATIONS BY PROPERTY
PROPERTY NAME ADDRESS APN NO'S.
------------- ------- ---------
Non-Collateral Pool Properties:
Regency Plaza Shopping Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 243-0020-036-0000
Citrus Heights, CA 243-0020-041-0000
243-0020-047-0000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. 243-0060-039-0000
Citrus Heights, CA 243-0060-041-0000
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇ ▇▇▇▇ ▇▇▇▇. 295-0381-003-0000
Sacramento, CA
▇▇▇▇▇▇ ▇▇▇▇▇ Office Park I ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ 285-0130-019-0000
Sacramento, CA
▇▇▇▇▇▇ ▇▇▇▇▇ Office Park II 2025, 2035 & ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
Commerce Street ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 118-310-008-6
Corona, CA
Consumer Circle ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 118-310-025-1
Corona, CA
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 118-310-026-2
Corona, CA
Page 2 of 2
76
SCHEDULE 7.1.13
SURETY OBLIGATIONS
BORROWER IS NOT OBLIGATED AS SURETY OR INDEMNITOR UNDER ANY SURETY OR SIMILAR
BOND OR OTHER CONTRACT ISSUED OR ENTERED INTO ANY AGREEMENT TO ASSURE PAYMENT,
PERFORMANCE, OR COMPLETION OF PERFORMANCE OF ANY UNDERTAKING OR OBLIGATION OF
ANY PERSON:
None
77
SCHEDULE 7.1.16
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
1. BORROWER'S PATENTS:
N/A - No Patents
2. BORROWER'S TRADEMARKS:
N/A - No Trademarks
3. BORROWER'S AND COPYRIGHTS:
N/A - No Copyrights
4. BORROWER'S LICENSES (OTHER THAN ROUTINE BUSINESS LICENSES, AUTHORIZING THEM
TO TRANSACT BUSINESS IN LOCAL JURISDICTIONS):
NAME OF LICENSE NATURE OF LICENSE LICENSOR TERM OF LICENSE
--------------- ----------------- -------- ---------------
Alcohol Beverage License Liquor License-Chico HI State of California 9/1/97-8/31/98
Dept. of Alcoholic Beverage Control
Seller's Permit Sales Tax License-Chico HI State of California Valid Until Revoked
State Board of Equalization or Canceled
Holiday Inn License Franchise License-Chico HI Holiday Inns Franchising, Inc. 7/20/93-5/14/01
Alcohol Beverage License Liquor License-Sac HI State of California 9/1/97-8/31/98
Dept. of Alcoholic Beverage Control
Seller's Permit Sales Tax License-Sac HI State of California Valid Until Revoked
State Board of Equalization or Canceled
Holiday Inn License Franchise License-Sac HI Holiday Inns Franchising, Inc. 7/20/93-12/12/00 *
Alcohol Beverage License Liquor License-WC HI State of California 9/1/97-8/31/98
Dept. of Alcoholic Beverage Control
Seller's Permit Sales Tax License-WC HI State of California Valid Until Revoked
State Board of Equalization or Canceled
Holiday Inn License Franchise License-WC HI Holiday Inns Franchising, Inc. 4/20/88-12/17/97 **
* Currently in the process of an early renewal for this Franchise License
with Holiday Inn.
** Currently in the process of renewing this Franchise License with Holiday
Inn.
78
SCHEDULE 7.1.20
LITIGATION
1. ACTIONS, SUITS, PROCEEDINGS AND INVESTIGATIONS PENDING AGAINST BORROWER:
N/A - No Material Suits, Proceedings or Investigations pending.
2. THE ONLY THREATENED ACTIONS, SUITS, PROCEEDINGS OR INVESTIGATIONS OF WHICH
BORROWER IS AWARE ARE AS FOLLOWS:
N/A - No Threatened Suits, Proceedings or Investigations that
Management is aware of.
79
SCHEDULE 7.1.22(A)
CAPITALIZED LEASES
BORROWER HAS THE FOLLOWING CAPITALIZED LEASES:
No Material Capital Leases.
80
SCHEDULE 7.1.22(B)
OPERATING LEASES
BORROWER HAS THE FOLLOWING OPERATING LEASES:
No Material Operating Leases.
81
SCHEDULE 7.1.23
PENSION PLANS
BORROWER HAS THE FOLLOWING PLANS:
N/A - No Pension Plans.
82
SCHEDULE 7.1.24
TRADE RELATIONS
1. ACTUAL, OR TO THE BEST OF BORROWER'S KNOWLEDGE, THREATENED TERMINATION,
CANCELLATION, OR LIMITATION OF, OR ANY MODIFICATION OR CHANGE IN, THE
BUSINESS RELATIONSHIP BETWEEN BORROWER AND ANY CUSTOMER OR ANY GROUP OF
CUSTOMERS WHOSE PURCHASES INDIVIDUALLY OR IN THE AGGREGATE ARE MATERIAL TO
THE BUSINESS OF BORROWER, OR WITH ANY MATERIAL SUPPLIER:
On February 4, 1997, Peregrine received a 30-day notice of default under
its Holiday Inn Franchise License for the Sacramento hotel as a result of
not completing refurbishments required by Holiday Inn under their Property
Improvement Program ("PIP"). Management was able to negotiate several
extensions of time in which to complete the required PIP refurbishments;
however, due to time constraints and the fact that the required PIP
refurbishments were out-dated, management meet with representatives of
Holiday Inn to discuss the matter. Management's negotiations resulted in a
mutually agreeable understanding as follows:
Peregrine applied for an early renewal of the Holiday Inn Franchise
License, which required Peregrine to pay Holiday Inn a Franchise License
renewal fee of $500/room ($112,500).
In connection with the Franchise License renewal, Holiday Inn conducted a
new PIP at the Sacramento hotel and issued a new listing of required PIP
refurbishments and a timetable for completion of the required PIP
refurbishments. The completion timetable issued by Holiday Inn begins upon
the execution of the new Franchise License which is expected on or before
11/26/97.
NOTE: Holiday Inn has not released Peregrine from the 30-day notice of
default. The understanding reached between Peregrine and Holiday Inn did
not cure the default previously issued by Holiday Inn, but merely modified
the required PIP refurbishment listing and granted Peregrine additional
time in which to complete the required PIP refurbishments. Should
Peregrine not comply with the Holiday Inn's completion timetable, Holiday
Inn could assert that Peregrine is in default of the Franchise License and
could attempt to terminated the Franchise License. If the License is
terminated, Peregrine could be required to pay termination fees of
approximately $850,000.
2. THE FOLLOWING PRESENT CONDITIONS OR STATE OF FACTS OR CIRCUMSTANCES WHICH
WOULD MATERIALLY AFFECT ADVERSELY BORROWER OR PREVENT BORROWER FROM
CONDUCTING SUCH BUSINESS AFTER THE CONSUMMATION OF THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT IN SUBSTANTIALLY THE SAME MANNER IN WHICH
IT HAS HERETOFORE BEEN CONDUCTED:
See Discussion Above.
83
SCHEDULE 7.1.25
COLLECTIVE BARGAINING AGREEMENTS; LABOR CONTROVERSIES
1. BORROWER IS A PARTY TO THE FOLLOWING COLLECTIVE BARGAINING AGREEMENTS:
TYPE OF AGREEMENT PARTIES TERM OF AGREEMENT
----------------- ------- -----------------
Collective Bargaining Agreement The Peregrine Real Estate Trust as 11/1/96-10/31/99
Owner/Operator of the Holiday Inn
Walnut Creek and Hotel Employees
and Restaurant Employees Local 2850 *
* Collective Bargaining Agreement is actually between the Union and
Crossroads Hospitality Company in its capacity as the Operator of the
Holiday Inn Walnut Creek; however, Peregrine terminated its management
contract with Crossroads on 10/21/97 and will be substituted in the
Agreement.
2. MATERIAL GRIEVANCES, DISPUTES OF CONTROVERSIES WITH EMPLOYEES ARE AS FOLLOWS:
PARTIES INVOLVED NATURE OF GRIEVANCE, DISPUTE OR CONTROVERSIES
---------------- ---------------------------------------------
Hotel Employees and Restaurant Class Action Grievance:
Employees Local 2850 and The Unilateral changes in working conditions,
Peregrine Real Estate Trust drug testing, reapplications, evaluations and
changes to employee handbook.
NOTE:
When Peregrine terminated its
management contract with Crossroads
all Hotel employees, who were
employees of Crossroads, were
terminated. Peregrine allowed all of
these former Hotel employees to apply
for jobs with Peregrine. Peregrine
required each person to pass a drug
test, placed each person on an initial
90 day probationary period and
provided each person with Peregrine's
own employee handbook. Unilateral
changes in working conditions, drug
testing, re-applications, evaluations
and changes to employee handbook.
▇▇▇▇ ▇▇▇▇▇▇ and The Peregrine Complaint:
Real Estate Trust Employee had a $0.25 / hour wage reduction and
a change in his job title with no changes in his
job description.
NOTE:
Employees job title when employed at
the Hotel by Crossroads was Banquet
Manager. When Peregrine terminated the
management contract with Crossroads
and hired this employee, his title
changed to Banquet Server and his pay
was $0.25 / hour less.
3. THREATENED STRIKES, WORK STOPPAGES AND ASSERTED PENDING DEMANDS FOR
COLLECTIVE BARGAINING ARE AS FOLLOWS:
None
84
SCHEDULE 8.2.3
TOTAL INDEBTEDNESS
CURRENT
PRINCIPAL
NOTE ORIGINAL BALANCE
SECURED PARTY NATURE OF LIEN DATED PRINCIPAL NOTE 12/2/1997
------------- -------------- ----- -------------- ---------
1. SENIOR MORTGAGES:
a. SunAmerica Life Insurance Company Note Payable - Regency Plaza Shopping Center 9/27/1994(1) $ 8,868,580.00 $ 8,761,320.84
Loan Servicer: Westco Real Estate
Finance Corporation
Collateral:
First Deed of Trust and Assignment,
Security Agreement, Fixture Filing,
Financing Statement and Assignment of
Leases and Rents
b. SunAmerica Life Insurance Company Note Payable - Sunrise Hills Shopping Center 9/27/1994(1) $ 4,335,750.00 $ 4,283,312.11
Loan Servicer: Westco Real Estate
Finance Corporation
Collateral:
First Deed of Trust and Assignment,
Security Agreement,
Fixture Filing, Financing Statement and
Assignment of Leases and Rents
c. SunAmerica Life Insurance Company Note Payable - University Village Shopping 9/27/1994(1) $ 7,732,441.00 $ 7,646,282.49
Loan Servicer: Westco Real Estate Center
Finance Corporation
Collateral:
First Deed of Trust and Assignment,
Security Agreement, Fixture Filing,
Financing Statement and Assignment of
Leases and Rents
d. State Farm Life Insurance Company Note Payable - ▇▇▇▇▇▇ ▇▇▇▇▇ Office Park I 9/27/1994(1) $ 1,322,306.36 $ 1,250,303.11
Loan Servicer: GMAC Commercial
Mortgage
Collateral:
First Deed of Trust and Assignment of Rents
e. Structured Asset Securities Note Payable - ▇▇▇▇▇▇ ▇▇▇▇▇ Office Park II 9/27/1994(1) $ 2,407,868.37 $ 2,376,289.48
Corporation Loan Servicer:
Banc One Management and
Consulting Corp.
Collateral:
First Deed of Trust with Assignment of
Rents and Fixture Filing
Page 1 of 3
85
SCHEDULE 8.2.3
TOTAL INDEBTEDNESS
CURRENT
PRINCIPAL
NOTE ORIGINAL BALANCE
SECURED PARTY NATURE OF LIEN DATED PRINCIPAL NOTE 12/2/1997
------------- -------------- ----- -------------- ---------
2. SENIOR NOTES: Collateral:
All of Peregrine's now existing or hereafter
arising interest, however such interest may
arise in any and all real or personal
property, including, without limitation, (a)
all real property and fixtures encumbered by
the Deeds of Trust, and (b) all personal
property described in the Pledge and
Security Agreement, including all personal
property described in the Description of
Collateral in Exhibit A the Pledge and
Security Agreement, provided that Collateral
shall not include After Acquired Property.
a. Pacific Mutual Life Insurance
Company 9/27/1994(3) $10,652,463.00(2)$ -
b. Orix USA Corporation 9/27/1994(3) $ 1,597,870.00(2)$ -
c. Gateway Recovery Trust 9/27/1994 $ 3,408,788.00(2)$ 2,373,651.62
d. The Prudential Insurance Company of
America 9/27/1994 $ 3,249,001.00(2)$ 2,262,498.38
e. Gateway Recovery Trust 9/27/1994 $ 3,994,674.00(2)$ 2,780,638.77
f. Weyerhaeuser Company Master
Retirement Trust 9/27/1994 $ 1,538,748.00(2)$ 1,070,776.15
g. TCW Special Credits Fund IV 9/27/1994 $ 4,958,189.00(2)$ 3,451,253.40
h. TCW Special Credits Plus Fund 9/27/1994 $ 5,300,134.00(2)$ 3,690,183.16
i. TCW Special Credits Trust IV 9/27/1994 $ 4,274,301.00(2)$ 2,975,156.45
j. TCW Special Credits Trust IVA 9/27/1994 $ 1,025,832.00(2)$ 715,002.77
k. Weyerhaeuser Real Estate
Opportunities Separate Account 10/1/1997(3) $ -(2)$ 853,009.68
l. OCM Real Estate Opportunities Fund
A, L.P. 10/1/1997(3) $ -(2)$ 2,814,931.95
m. OCM Real Estate Opportunities Fund
B, L.P. 10/1/1997(3) $ -(2)$ 4,862,155.19
------------- --------------
$40,000,000.00 $27,849,257.52
============= ==============
Page 2 of 3
86
SCHEDULE 8.2.3
TOTAL INDEBTEDNESS
CURRENT
PRINCIPAL
NOTE ORIGINAL BALANCE
SECURED PARTY NATURE OF LIEN DATED PRINCIPAL NOTE 12/2/1997
------------- -------------- ----- -------------- ---------
3. OTHER INDEBTEDNESS:
Sumitomo Bank of California Note Payable - HI Sac Van 8/3/1995 $ 20,401.30 $ 12,000.00
Collateral:
1994 Ford Aerostar Van ID
#▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Sumitomo Bank of California Note Payable - HI Chico Van 7/26/1995 $ 19,602.51 $ 11,500.00
COLLATERAL:
1995 FORD AEROSTAR VAN ID
#▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
(1) Date of Amended and Restated Promissory Note.
(2) Deferred Interest Notes were issued 12/31/94, 3/31/95, 6/30/95, 9/30/95,
12/31/95, 3/31/96, 6/30/96 and 9/30/96. All Deferred Interest Notes were
paid in full on 1/3/97 with proceeds from the sale of CalREIT. In addition,
a portion of the Original Principal Notes has been paid down.
(3) In September 1997, the Weyerhaeuser Real Estate Opportunities Separate
Account, the OCM Real Estate Opportunities Fund A, L.P. and the OCM Real
Estate Opportunities Fund B, L.P. purchased all holdings (Common Shares of
Beneficial Interest, Redeemable Convertible Preferred Stock and Notes) of
Pacific Mutual Life Insurance Company and ORIX USA Corporation.
Page 3 of 3
87
SCHEDULE 8.2.5
PERMITTED LIENS
CURRENT
PRINCIPAL
BALANCE
SECURED PARTY NATURE OF LIEN 12/2/97
------------- -------------- -------
1. SENIOR MORTGAGES:
a. SunAmerica Life Insurance Company Note Payable - Regency Plaza Shopping Center $ 8,761,320.84
Loan Servicer: Westco Real Estate
Finance Corporation
Collateral:
First Deed of Trust and Assignment, Security Agreement,
Fixture Filing, Financing Statement and Assignment of
Leases and Rents
b. SunAmerica Life Insurance Company Note Payable - Sunrise Hills Shopping Center $ 4,283,312.11
Loan Servicer: Westco Real Estate
Finance Corporation
Collateral:
First Deed of Trust and Assignment, Security Agreement,
Fixture Filing, Financing Statement and Assignment of
Leases and Rents
c. SunAmerica Life Insurance Company Note Payable - University Village Shopping Center $ 7,646,282.49
Loan Servicer: Westco Real Estate
Finance Corporation
Collateral:
First Deed of Trust and Assignment, Security Agreement,
Fixture Filing, Financing Statement and Assignment of
Leases and Rents
d. State Farm Life Insurance Company Note Payable - ▇▇▇▇▇▇ ▇▇▇▇▇ Office Park I $ 1,250,303.11
Loan Servicer: GMAC Commercial Mortgage
Collateral:
First Deed of Trust and Assignment of Rents
e. Structured Asset Securities Corporation Note Payable - ▇▇▇▇▇▇ ▇▇▇▇▇ Office Park II $ 2,376,289.48
Loan Servicer: Banc One Management and
Consulting Corp.
Collateral:
First Deed of Trust with Assignment of Rents and Fixture
Filing
Page 1 of 3
88
SCHEDULE 8.2.5
PERMITTED LIENS
CURRENT
PRINCIPAL
BALANCE
SECURED PARTY NATURE OF LIEN 12/2/97
------------- -------------- -------
2. SENIOR NOTES: Collateral:
All of Peregrine's now existing or hereafter arising interest,
however such interest may arise in any and all real or
personal property, including, without limitation, (a) all real
property and fixtures encumbered by the Deeds of Trust,
and (b) all personal property described in the Pledge and
Security Agreement, including all personal property
described in the Description of Collateral in Exhibit A
the Pledge and Security Agreement, provided that Collateral
shall not include After Acquired Property.
a. Pacific Mutual Life Insurance Company $ -
b. ORIX USA Corporation $ -
c. Gateway Recovery Trust $ 2,373,651.62
d. The Prudential Insurance Company of America $ 2,262,498.38
e. Gateway Recovery Trust $ 2,780,638.77
f. Weyerhaeuser Company Master Retirement Trust $ 1,070,776.15
g. TCW Special Credits Fund IV $ 3,451,253.40
h. TCW Special Credits Plus Fund $ 3,690,183.16
i. TCW Special Credits Trust IV $ 2,975,156.45
j. TCW Special Credits Trust IVA $ 715,002.77
k. Weyerhaeuser Real Estate Opportunities
Separate Account $ 853,009.68
l. OCM Real Estate Opportunities Fund A, L.P. $ 2,814,931.95
m. OCM Real Estate Opportunities Fund B, L.P. $ 4,862,155.19
--------------
$27,849,257.52
==============
Page 2 of 3
89
SCHEDULE 8.2.5
PERMITTED LIENS
CURRENT
PRINCIPAL
BALANCE
SECURED PARTY NATURE OF LIEN 12/2/97
------------- -------------- -------
3. OTHER INDEBTEDNESS:
Sumitomo Bank of California Note Payable - HI Sac Van ~ $ 12,000.00
Collateral:
1994 Ford Aerostar Van ID #▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Sumitomo Bank of California Note Payable - HI Chico Van ~ $ 11,500.00
Collateral:
1995 Ford Aerostar Van ID #▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Page 3 of 3
90
Schedule E-1
ELIGIBLE REAL PROPERTY
(a) the parcel of real property commonly referred to as
"16th & K Streets" that is located at ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (Sacramento County) and which bears parcel number 006-
▇▇▇▇-▇▇▇-▇▇▇▇;
(b) the parcel of real property commonly referred to as
"11135 Trade Center" or "Trade Center A" that is located at ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Sacramento County)
and which bears parcel number 072-0222-021-0000;
(c) the parcel of real property commonly referred to as
"11167 Trade Center" or "Trade Center C" that is located at ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Sacramento County)
and which bears parcel number 072-0222-033-0000;
(d) the parcel of real property commonly referred to as
"Burbank Mini-Storage" that is located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Sonoma County) and which bears parcel
number 125-091-031-000;
(e) the parcel of real property commonly referred to as
"Downtown Mini-Storage" that is located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Sacramento County) and which bears parcel
number 009-0217-001-0000;
(f) the parcel of real property commonly referred to as
"Holiday Inn Chico" that is located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Butte County) and which bears parcel number
006-240- 022-000;
(g) the parcels of real property commonly referred to as
"Holiday Inn Sacramento - Northeast" that are located at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Sacramento County) and which
bear parcel numbers 228-0143-023-0000 and 228-0143-018-0000;
(h) the parcel of real property commonly referred to as
"Holiday Inn Walnut Creek" that is located at ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Contra Costa County) and which
bears parcel number ▇▇▇-▇▇▇-▇▇▇;
91
(i) the parcels of real property commonly referred to as
"One Sunrise" that are located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Sacramento County) and which bear parcel
numbers 072-0450-054-0000, 072-0430-055-0000, and 072-0430-056-
0000;
(j) the parcel of real property commonly referred to as
"Parkway Center" that is located at 5200 Golden Foothill Parkway,
El Dorado Hills, California (El Dorado County) and which bears
parcel number ▇▇▇-▇▇▇-▇▇▇;
(k) the parcel of real property commonly referred to as
"3900 Lennane" that is located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (Sacramento County) and which bears parcel number 225-
▇▇▇▇-▇▇▇-▇▇▇▇;
(l) the parcel of real property commonly referred to as
"▇▇▇▇▇▇▇ Service Center" that is located at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Contra Costa County) and which bears
parcel number ▇▇▇-▇▇▇-▇▇▇;
(m) the parcel of real property commonly referred to as
"TGI Friday's" that is located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Sacramento County) and which bears parcel
number 243-0060-040-0000; and
(n) the parcels of real property commonly referred to as
"Town Center" that are located at 2501-2525 Cherry Avenue, Signal
Hill, California (Los Angeles County) and which bear parcel
numbers ▇▇▇▇-▇▇▇-▇▇▇ and ▇▇▇▇-▇▇▇-▇▇▇.
92
SCHEDULE O-1
OTHER REAL PROPERTY (UNENCUMERED REAL PROPERTY)
PROPERTY NAME ADDRESS APN NO'S.
------------- ------- ---------
Commerce Street ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 118-310-008-6
Corona, CA
Consumer Circle ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 118-310-025-1
Corona, CA
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 118-310-026-2
Corona, CA
93
SCHEDULE S-1
SENIOR MORTGAGES
CURRENT
PRINCIPAL
NOTE ORIGINAL BALANCE
SECURED PARTY NATURE OF LIEN DATED PRINCIPAL NOTE 12/2/1997
------------- -------------- ----- -------------- ---------
SENIOR MORTGAGES:
A. SunAmerica Life Insurance Company Note Payable - Regency Plaza Shopping 9/27/1994(1) $ 8,868,580.00 $ 8,761,320.84
Loan Servicer: Westco Real Estate Center
Finance Corporation
Collateral:
First Deed of Trust and Assignment,
Security Agreement, Fixture Filing,
Financing Statement and Assignment of
Leases and Rents
B. SunAmerica Life Insurance Company Note Payable - Sunrise Hills Shopping 9/27/1994(1) $ 4,335,750.00 $ 4,283,312.11
Loan Servicer: Westco Real Estate Center
Finance Corporation
Collateral:
First Deed of Trust and Assignment,
Security Agreement, Fixture Filing,
Financing Statement and Assignment of
Leases and Rents
C. SunAmerica Life Insurance Company Note Payable - University Village 9/27/1994(1) $ 7,732,441.00 $ 7,646,282.49
Loan Servicer: Westco Real Estate Shopping Center
Finance Corporation
Collateral:
First Deed of Trust and Assignment,
Security Agreement, Fixture Filing,
Financing Statement and Assignment of
Leases and Rents
D. State Farm Life Insurance Company Note Payable - ▇▇▇▇▇▇ ▇▇▇▇▇ Office 9/27/1994(1) $ 1,322,306.36 $ 1,250,303.11
Loan Servicer: GMAC Commercial Park I
Mortgage
Collateral:
First Deed of Trust and Assignment
of Rents
E. Structured Asset Securities Note Payable - ▇▇▇▇▇▇ ▇▇▇▇▇ Office 9/27/1994(1) $ 2,407,868.37 $ 2,376,289.48
Corporation Loan Servicer: Park II
Banc One Management and
Consulting Corp.
Collateral:
First Deed of Trust with Assignment
of Rents and Fixture Filing
(1) Date of Amended and Restated Promissory Note.
94
SCHEDULE S-2
SENIOR MORTGAGE REAL PROPERTY
LENDER PROPERTY NAME ADDRESS APN NO'S.
------ ------------- ------- ---------
SunAmerica Life Insurance Company Regency Plaza Shopping Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 243-0020-036-0000
Loan Servicer: Westco Real Estate Citrus Heights, CA 243-0020-041-0000
Finance Corporation 243-0020-047-0000
SunAmerica Life Insurance Company Sunrise Hills Shopping Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. 243-0060-039-0000
Loan Servicer: Westco Real Estate Citrus Heights, CA 243-0060-041-0000
Finance Corporation
SunAmerica Life Insurance Company ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇ ▇▇▇▇ ▇▇▇▇. 295-0381-003-0000
Loan Servicer: Westco Real Estate Sacramento, CA
Finance Corporation
State Farm Life Insurance Company ▇▇▇▇▇▇ ▇▇▇▇▇ Office Park I ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ 285-0130-019-0000
Loan Servicer: GMAC Commercial Mortgage Sacramento, CA
Structured Asset Securities Corporation ▇▇▇▇▇▇ ▇▇▇▇▇ Office Park II 2025, 2035 & ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ 285-0130-002-0000
Loan Servicer: Banc One Management and Sacramento, CA
Consulting Corp.
95
Exhibit C-1
COMPLIANCE CERTIFICATE
[Letterhead of Borrower]
__________________, 19__
FLEET CAPITAL CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration Manager
The undersigned, the chief financial officer of THE PEREGRINE
REAL ESTATE TRUST, a California real estate trust ("Borrower"), gives this
certificate to Fleet Capital Corporation ("Lender") in accordance with the
requirements of subsection 8.1.2 of that certain Loan and Security Agreement,
dated as of December 4, 1997, between Borrower and Lender ("Loan Agreement").
Capitalized terms used in this Certificate, unless otherwise defined herein,
shall have the meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and
statements of income of Borrower for the [fiscal year] [monthly period] ending
_____________, 19__, copies of which are attached hereto, I hereby certify that:
(a) Cash Flow is $______________ for the Trailing
[Six/Nine/Twelve] Month Period most recently ended;
(b) Debt Service is $______________ for the Trailing
[Six/Nine/Twelve] Month Period most recently ended;
(c) Debt Service Coverage Ratio is ______ to 1.0 for the
Trailing [Six/Nine/Twelve] Month Period most recently ended;
(d) Capital Expenditures during the period and for the
fiscal year to date total $__________ and $___________, respectively.
(e) The aggregate amount of Capital Expenditures made
since October 1, 1997 is $__________.
96
(f) The aggregate amount of Capital Expenditures related
to Properties of Borrower that do not compose the Eligible Real Property
made since the Closing Date is $__________.
(g) The aggregate amount of prepayments made pursuant to
subsection 8.2.15(a)(iv) since the Closing Date is $__________.
2. No Default exists on the date hereof, other than:
________________________________________ [if none, so state]; and
3. No Event of Default exists on the date hereof, other
than ________________________________ [if none, so state].
Very truly yours,
--------------------------------
Chief Financial Officer